Blockchain brought a revolution in online transaction. Blockchain made online transactions transaparent by identifying the sender and receiver of the transaction. with the help of decentralisation concept, sender and receiver can interact directly. Due to its features, Blockchain can be used in various industries like Banking, Healthcare,etc
How Blockchain is a Disrupter to conventional notions of currency
What is Blockchain?
Blockchain is an undoubtedly smart invention. It is used to send the information from a sender to receiver in a completely secure and automated fashion. When a transaction is initiated, a block is created. This block is checked by the systems present in the network. After checking, the block is added to the chain, and it is saved throughout the network. This process leads to the creation of a unique record.
Three Main Components of Blockchain
Prior to the invention of Bitcoin and Blockchain, we were using centralized services. In centralized services, a centralized object will store the information, and we have to interact with that object to get the required information.
Banking system uses centralized services for their operations. The money is stored in the bank, and any customer should do the transaction through the bank.
The disadvantages of Centralized system
1) In a centralized system, data is stored in one place, so attackers or hackers can easily leak the information.
2) If any software update is going on in a centralized system, then the work of the entire system is stopped.
3) If any stoppage occurs in the centralized system, then nobody can access the information it has.
In a decentralized system, members who are present in the network will have the information. If an entity wants to interact with another entity, they can do that without the help of a third party.
2) Transparency
The most important element of Blockchain is transparency. Blockchain provides both transparency and privacy. With the help of cryptography, the true identity of the person is concealed, and the public addresses of the person are displayed.
With the help of public addresses, the actual identity of the person is secured, but you can see all the transactions happen. If you know the public address of any big company, then we can know all the transactions done by that company.
3) Immutability
In the blockchain environment, immutability is a process in which the data once entered cannot be erased. In Blockchain, this concept is implemented with the help of Cryptography Hash function.
Hashing is a procedure in which it takes the input of any length and gives an output of fixed length. Bitcoin uses SHA256(Secure Hash algorithm-256) and takes fixed output.
If any small change occurs in the given input, then the output is also changed. Applying SHA-256 becomes difficult when we are dealing with a large amount of data, so, instead of remembering the input data, we should remember the hash, and we should trace it.
Due to these features, Blockchain provides a new method and strategy to carry out the transactions. This makes users avoid the conventional method of transactions.
Business Applications of Blockchain
The Applications of Blockchain are as follows:
1) Smart contracts
The distributed ledger technology provides smart contracts coding, which executes once particular conditions are satisfied.
2) Sharing Economy
With the success of Uber, Airbnb companies sharing economy is proved. Sharing rides in uber is the perfect example of sharing economy.
3) CrowdFunding
Crowdfunding efforts like Gofoundme, Kickstarter are doing progressive work for developing a peer-based economy.
4) Governance
Blockchain makes the transactions transparent and completely available to the public. Distributed Database technology can make elections more transparent to the public.
5)Supply chain auditing
Consumers who use the products, want to know whether the quality asserts made by the companies are genuine or not. Distributed ledger technology helps the consumer to validate these asserts made by the company.
6) File storing
File storing is decentralized, and Decentralization of data makes data secure from the attackers and hackers. Interplanetary File system(IPFS) eases the conceptualization of web operations.
7) Prediction Markets
Predictions from Crowdsourcing is based on the event possible and proved to have high accuracy. In future, other applications cannot find a defect in the Blockchain.
8) Securing Intellectual Property
Digital Information is extensively distributed, replicated due to the usage of the internet. Due to this, writers can lose their copyrights. To avoid this problem, writers use smart contracts to protect their rights.
Conclusion
In this way, we can avoid the traditional methods for implementing transactions with the help of Blockchain. Transparency and Decentralization make the Blockchain the best technology for carrying out transactions.
