Blockchain is a distributed and immutable state of transaction records. It is different because it is entirely decentralized. Blockchain makes it incredibly difficult to attack or tamper with the system by distributing identical copies of a database throughout an entire network.
Wondering what is distributed, immutable and decentralized.
Let’s explore all these terms in detail.
To be distributed means that participants will have identical copies of the database. Even the minute change will get reflected in it. Sometimes, Blockchain and Distributed Ledger Technology can be considered as same. A Blockchain can be DLT, but DLT can not necessarily be a blockchain. The distributed nature of blockchain makes it more transparent.
Immutable means that once a record is created cannot get altered by anyone. No one will be able to modify, falsify or manipulate the database in the network. The immutable element of the blockchain makes it more secure and ensures authenticity and a higher level of privacy.
What does decentralization mean in blockchain?
A single entity cannot govern the blockchain network. Decentralization helps to maintain the fidelity of the network. If someone tries to modify the record in the database, the other nodes will not get sacrificed. The remaining nodes can cross-verify each other and pinpoint the faulty node. Therefore, it is the most dependable technology.
Read More : Explore the five ways blockchain can be used in education
Advantages of Blockchain
Permanent: As a decentralized network with many reliable nodes, records or information stored using blockchain technology is permanent, meaning users don’t have to worry about data loss. It is because duplicate copies of the data are present at each local node.
Transparent: Blockchain has made transaction histories transparent to a greater extent. Since it is a particular form of distributed ledger, each node in the network has a copy of the documentation. Everyone can view the data on a blockchain ledger and notice the change and the updated record if a transaction history is changed. Therefore, participants have access to all information regarding currency exchange.
Security: Blockchain’s ability to produce an unchangeable record of transactions with end-to-end encryption, which prevents fraud and illegal activity, accounts for increased security. Furthermore, blockchain can better handle privacy concerns than conventional computer systems by anonymizing data and requiring permissions to limit access.
Speed: Blockchain is much faster at handling transactions than traditional techniques since it does away with intermediaries and replaces any human processes present in transactions. Blockchain can sometimes complete a transaction in a matter of seconds or less. The speed at which a blockchain-based system can process transactions can vary depending on several factors, including the size of each data block and network activity.
Reduced Costs: Blockchain eliminates the requirement for any vendor charges because it lacks an inherited centralized player. Additionally, authenticating a transaction requires less engagement, which reduces the requirements for spending money or effort on simple tasks.
Censorship: As it is not under the control of a single entity, this technology is uncensored. Therefore, the network cannot get stopped by a single authority, including governments. Trustworthy nodes for validation and consensus methods that authorize transactions utilizing smart contracts are concepts present in it.
Final Thoughts
Without hesitation, people have acknowledged that blockchain technology will be advantageous and appealing to organizations and enterprises which will undoubtedly invest in it. Although it will help battle several market-wide problems, this technology still has a long way to go. Top blockchain protocols like Ethereum, Polygon, Near, Binance, Polkadot has made blockchain technology more popular among the masses.
There will be noticeable growth in this industry over time. Blockchain technology has engrossing investment prospects to offer that are all well worth examining.