‘Blockchain’ – the word that is heard around every corner, with everyone talking about it. But what exactly does it mean? Why are we paying so much attention to a technology named ‘Blockchain?’ This article will break it down for you to help you gain a better understanding of this new technology.
What does ‘Blockchain’ mean?
Blockchain – is a chain of blocks – with a block being a set of encrypted transactions – which is kept on different servers simultaneously. Blockchain – is a decentralized database that has a huge amount of nodes (servers) checking each other. Transactions are then broadcasted, and every node is creating their own updated version of events.
What makes this technology so unique and useful?
The innovation of this technology is the way in which the information is registered and distributed – it eliminates the need for a trusted party to facilitate digital relationships.
Blockchain is built on 3 key concepts:
- Public key cryptography – involves a pair of keys known as a public key and a private key. Both keys are associated with an entity that needs to authenticate its identity electronically or to sign or encrypt data. Each public key is published and the corresponding private key is kept secret. Data that is encrypted with the public key can be decrypted only with the corresponding private key;
- P2P Network – refers to computer networks that use distributed architecture. This means that all computers or devices that are part of it share the workloads in the network. The computers or devices that are part of a peer-to-peer network are called peers. Each peer from a peer-to-peer network is equal to the other peers. There are no privileged peers, and there is no central administrator device in the center of the network;
- Blockchain’s protocol – it’s how a concrete implementation works.
Blockchain is beginning to influence a lot of industries and is not going to stop growing. Every day people find more ways to use the technology, with the biggest example being bitcoin and the world of cryptocurrency. In my own opinion, the centralized manner of data storage has outlived itself and will soon begin to be replaced by blockchain technology.
Blockchain is awesome and I can say with confidence that it will change our world.