Blockchain is a digital record-keeping technology where data is stored in a decentralized, distributed, and transparent manner. Each group of data is called a “block,” and these blocks are linked together using cryptographic methods to form a “chain.” While blockchain technology is best known for its role in powering cryptocurrencies, it also offers groundbreaking solutions in areas such as finance, healthcare, logistics, and public services.
How Does Blockchain Work?
To add a transaction to the blockchain, a consensus must be reached among participants in the network. Once the transaction is verified, it is grouped into a block and added to the chain. Each block contains data from the previous one, making the entire system tamper-proof and immutable.
Key Features of Blockchain Technology
- Decentralization: Data is not stored in a single central server but is distributed across all participants (nodes) in the network.
- Transparency: Every transaction can be viewed and tracked by all users in the system.
- Immutability: Once recorded, data is permanently written to the blockchain and cannot be altered.
- Security: Information is protected through advanced cryptographic techniques, ensuring data integrity and safety.
Where Is Blockchain Used?
- Cryptocurrencies: Blockchain provides a secure and decentralized infrastructure for digital currencies like Bitcoin and Ethereum by recording transactions transparently.
- Smart Contracts: These are digital agreements that automatically execute when predefined conditions are met, eliminating the need for intermediaries.
- Supply Chain Management: Blockchain enables the step-by-step tracking and auditing of products from production to delivery.
- Digital Identity and Voting Systems: It secures personal data, maintains data integrity in authentication and e-voting processes, and prevents fraud.