Introduction to Blockchain Technology
In this digital world, when it comes to the authenticity and security of data, then there is always a question mark. That’s where Blockchain emerged as a technology to promise the authenticity of the data. The blockchain is a distributed ledger of data that is immutable in nature. The structure is like a growing list made of blocks, and each block holds encrypted data, which is actually a cryptographic hash map of the previous data, timestamp, and new data. For the first time, Satoshi Nakamoto published his paper on Blockchain with the implementation of Bitcoin. However, the identity of this name is still not clear if he is an individual or a group of people.
What is Blockchain?
We all know what a database is. A database is a collection of tables that have related data organized in the form of rows. A database is typically stored in a centralized server, and if someone gets unauthorized access to the database server, then the entire data is compromised.
But, a Blockchain is a decentralized, distributed database where everyone involved in the transaction (or, let’s say, everyone involved in the Blockchain network) has a copy of the database. Therefore, any new transaction must be consented to by everyone, and the same needs to be updated in everyone’s copy. So, even if someone hacks into one of the nodes of the Blockchain network and modifies it, the same won’t be reflected in the rest of the nodes’ copy. Thus, failing to prove its authenticity.
The point of interest here is that; though the data is distributed among everyone who is involved in the transaction, the data is not visible to all. The data is encrypted using very complex algorithms, and the data is only readable by the rightful owner. Any new addition or an update will always happen at the end of the list, and the list is immutable. So, every addition and every update is logged and recorded. Thus, making the whole transaction traceable end to end.
So, by design itself, Blockchain is modification resistant.
There are three types of Blockchain:
- Public Blockchain: This is the Blockchain network where anyone can join the network, transact in it and become a validator in it.
- Private Blockchain: This is the Blockchain network where the network administrators invite others and grant membership so as to get access rights.
- Consortium Blockchain: This is a semi-decentralized Blockchain network. It also requires permissions, but a single organization will be running a node of Blockchain.
Understanding Blockchain with an Example
Let’s consider a scenario where there is a Blockchain network, and all have the database having the house address of people, and the rule is – only the house owner can change his house address. So, let’s say Mr. A being a house owner, raises a query to change his house address, and the query is shared across the network. People know that A is the owner and them consent (note that the power of consent is codified and not at the will of the person), and the address gets changed in everyone’s database. Any changes that compromise the integrity of the databases will not be entertained by Blockchain, which is why Blockchain is called as the Trust Protocol.
Required skills to learn this technology:
- Good mathematical and coding background.
- Management and marketing are equally important if you want your product to survive.
Applications of Blockchain Technology
- We are all very well aware of the cryptocurrencies like Bitcoin, Ripple, Etherium, etc., which employ Blockchain as their underlying technology.
- They can be employed in patents, copyrights, and smart contracts for properties. These would thus hold the log of who owned it, to whom they sold, and again, there cannot be multiple sales/purchases of the Sold ones.
- Many banking services are employing Blockchain for validation and authentication purposes.
- Companies that deal with e-commerce businesses will be able to manage their supply chain by employing Blockchain.
What are the Advantages of Blockchain?
- Firstly, though vulnerable to security threats, it is relatively safer when compared to centralized systems (even in crash handling mechanisms).
- This eliminates or nullifies the limited involvement of people giving equal rights to everyone.
- It helps to create an online identity of your own.
- The greatest advantages lie in the potential applications mentioned above.
What are the Hurdles in Adopting Blockchain?
- This requires research and skill. So, the very first hurdle is knowledge and understanding.
- The speed of transactions, data management, and verification will involve a lot of fast innovation, and adoption becomes challenging.
- Coming up with ways of adopting Blockchain technology along with traditional mechanisms (like in the banking sector) is difficult.
- There is no global standard on how Blockchain must act! All we know is – how it works.
- ‘Anonymous’ and ‘irreversible’ kind of Blockchain attributes might not be appreciated by all users because of different use cases.
- The major obstacle would be convincing society to adopt this technology.
Disadvantages of Blockchain
Is Blockchain devoid of cons? Not actually, the following are some disadvantages of Blockchain.
- Transactions and data management need a lot of computational resources.
- This can turn out to be fraudulent, and you will never know whom to catch.
Careers in Blockchain Technology
Though Blockchain is not so matured enough in the industry, it is still going to cause disruption in the market.
- If you’re a developer who has started a career recently, then it is good to get a certification in a Blockchain platform like Hyper Ledger.
- If you’re a senior technical professional, then you can have focused on building architectures for Blockchain applications.
Blockchain will have career opportunities in banking, cryptography, economics, e-commerce, etc.
Thus, Blockchain is a gem and jewel in the platform of storing, validating, authorizing, and transacting online in this world where the final and biggest question is on the question of trust.
This has been a guide to What is Blockchain Technology? Here we discuss the concept, required skills, and advantages of Blockchain Technology. You can also go through our other suggested articles to learn more –