The technology of BlockChain -Part 1
You might have heard of the word “Bitcoin” or “Ethirium” if you are even slightly connected to the investment markets or even watches the world news. Bitcoin always makes its way in the headlines of top print media and broadcasting news of electronic media, due to its versatile nature and returns it provides to the users within a short span of time. But what exactly is Bitcoin or what is a Blockchain ?, let’s get a basic understanding of both in this part of- “The technology of BlockChain”.
If we go by the google definition “Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary like a bank”. Bitcoin works on the concept of decentralization where there is no one particular person with the authority to set its price or keeping the records of transactions. Bitcoin does not have a physical presence like Indian Rupee or USD rather it is digital in form, this means we can store bitcoin as a balance in digital wallets but cannot be tangible. Bitcoin in started by a person not known till now with pen name Satoshi Nakamoto to overcome the basic problem of a centralized system that caused the Finacial crisis of 2008.
Bitcoin is one of the cryptocurrency which means it is stored digitally. Blockchain is the outcome of bitcoin technology and comes into the picture after bitcoin but has multiple functionalities. One thing is very clear that Bitcoin is a currency with a catch that no one in particular, governs it, Now what that means is if we take examples of Indian Rupees where we can read the word written by the governor of RBI taking accountability and reasonability of the currency note issued by them to the general public and assures the bearer of the currency note that every person in India will accept that piece of paper as a value written on it. There is one thing to note is that RBI provides a guarantee that the bearer will get the same value of goods or service against the value provided on the currency note. Hence in this case RBI is acting as a centralized authority to regulate the price of Indian rupees. Let be clear that Rs.100 note today will be equal to Rs. 100 tomorrow also because RBI sets its value to Rs.100. In Bitcoin as a currency, there is no person regulating the value of 1 bitcoin, it is decided by the concept of Demand and Supply of Bitcoin
A bitcoin transaction is recorded in decentralized ledgers which is separately maintained with each of the participants and not with a single authority. This will be more clear with the understanding of the blockchain fundamentals. To conclude what bitcoin is we can say that it is digital money that is directly affected by the concept of demand and supply and not a centralized authority.
BlockChain refers to the decentralized storing of data and information with each participant/node rather than one server/node. To understand the BlockChain data storing method let us take an example of young boys playing cricket back in late 2000. what happened then is there is no scorekeeping method available handy even there is no apps to maintain the score because smartphones and app store is a far than reach. There is another issue within them is a lack of trust with the umpire, as there is high chance that the umpire is biased towards one particular team because mostly the guy who is not batting comes for umpiring. Hence this shows the doubt of participants over the accountability and centralized authority. This issue is solved by calling the score by all of the players after each ball so that everyone in the field is aware of the score in real-time and even in the case if anyone tries to change the score in between the match all others will correct the same or do not listen to that guy stating a different number other to the majority. This is exactly same as the BlockChain world, where each data/information is stored in a block and each block is approved by the members through the mechanism of consensus. we can say that there is no single person who influences the whole network which makes blockchain secured and private.
BlockChain do not have only single-use for cryptocurrency only but can be deployed in all the possible environment where a centralized authority is acting an intimidatory to work upon. Blockchain will bring change in the working environment of major corporate firms for better privatisation of their data with full accountability due to its non reversible nature of blocks.
Do visit the further parts of this “The BlockChain technology” to understand the more features of the blockchain and updates made within them.
