Blockchain is the DLT of a computer network shared between nodes. In this article, as Kriptokoin.com, “What is Blockchain?” We will answer the question. In addition, we will touch on other curious issues about blockchain.
What is blockchain?
At its core, blockchain is DLT that stores all kinds of data. A blockchain can record information about cryptocurrency transactions, NFT or DeFi smart contracts.
While any traditional database can store this type of information, blockchain is unique in that it is completely decentralized. Consider an Excel spreadsheet or a bank database. It is not kept in one place by a central administrator. Many identical copies of a blockchain database are maintained on multiple computers spanning a network. These individual computers are called nodes.
How does blockchain work?
The blockchain name is not accidental. The digital ledger is often described as a “chain” of individual data blocks. As new data is added to the network periodically, a new “block” is created and added to the “chain”. This includes all nodes that have updated their versions of the blockchain ledger to be the same.
How these new blocks are created is key to why the blockchain is considered highly secure. The majority of nodes must verify and validate the legitimacy of the new data before a new block is added to the ledger. For a cryptocurrency, they may include ensuring that new transactions in a block are not fraudulent or that the coins are not spent more than once. This is different from a standalone database or spreadsheet, where a person can make changes without supervision.
Transactions are typically secured using cryptography. This means nodes must solve complex mathematical equations to process a transaction.
“As a reward for efforts to validate changes in shared data, nodes are typically rewarded with new amounts of the blockchain’s native currency (e.g., new bitcoin on the bitcoin blockchain),” says Sarah Shtylman, fintech and blockchain consultant at Perkins Coie.
How Is Blockchain Used?
Blocks in Bitcoin’s blockchain store data about monetary transactions. Today, there are more than 10,000 cryptocurrency systems running on the blockchain. But it turns out that blockchain is actually a reliable way to store data about other types of transactions as well.
There are some companies that are already involved in the blockchain. These include Walmart, Pfizer, AIG, Siemens, Unilever and many other companies. For example, IBM created the blockchain to track the journey food products take to reach their location.
The food industry has witnessed numerous outbreaks of E. coli, salmonella, and listeria, as well as hazardous substances accidentally contaminating food. In the past, it took weeks to find the source of these outbreaks or the cause of the disease from what people ate. Using blockchain gives brands the ability to track the route of a food product from its origin, every stop it makes, and finally, its delivery. If a food is found to be contaminated, it can be traced from every stall to its source. Not only that, but these companies now see everything they may have come into contact with, allowing the problem to be identified much sooner and potentially saving lives. This is practically an example of blockchain, but there are many other forms of blockchain implementation.
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