What is Blockchain?
- Blockchain
We will keep this as simple as possible with easy-to-understand terminologies. Just an attempt to make people understand a technology that will soon disrupt the business world, BFSI sector, the healthcare system, and what not.
Why Blockchain is an emerging technology? How has it even become a buzz word?
To give an analogy, blockchain is the internet in the early nineties. It’s just waiting for the right time to explode as the internet did back then. Blockchain will connect the world so much more while the internet failed to do in that minuscule level.
In layman language, Blockchain is a database with computer infrastructure called nodes. In technical terms, Blockchain is a decentralized distributed ledger technology. We will try to break down the complex technical definition. Blockchain is decentralized means, there are no masters or slaves among the computer nodes. All the nodes act as a master here.
No single entity or a computer node controls the system. Blockchain is distributed means, the nodes are spread across regions and multiple nodes are not being placed together in the same region. Blockchain is ledger technology means, blockchain stores the information in an electronic format.
You may ask then what is the difference between a typical database and blockchain. The difference is how the data is stored or the architecture of the database itself. Basically, blockchain eliminates the intermediates in all business processes. For example, if you want to purchase an e-book online, instead of some online e-commerce company taking a cut in the money you pay and the credit/debit card company earning money on the sale, you can pay the digital currency directly to the author and unlock the book you wanted to read without any cut in the price. Money goes from you to the author. The second example, if you want to travel by air, say, from Chennai to Delhi, you must book your online tickets through online ticketing app like most of us do. Instead of them taking cuts in the purchase, blockchain will do that in zero (negligible) transaction cost. Only the ticket price. Now, the third example, if you want to transfer money online to your friend, you can transfer the money to your friend through online platforms like net banking, mobile banking, or UPI. Instead, blockchain will send the digital currency to your friend without having a bank as an intermediate. It’s good, right? It is way better than any other technology you name.
How does Blockchain work?
We just want you to picture thousands and thousands of google spreadsheets, that are being connected in a loop or like a chain. Blockchain technology is designed to update all the transactions in the Google spreadsheet.
Each transaction you make will be stored as a record. Each record is added to the block only after the network, called nodes, validates it.
Collective records will be stored in a block. Each block will be connected like a chain with another block using the Hash algorithm (Number of records is a block and the number of blocks is connected as a chain). Each block is linked with another with the help of the Hash function, which makes the Blockchain robust.
On the internet, everyone in the beginning had gone for blind trust, be it Amazon, Facebook, or Google. Now, all three are growing tremendously because of trust. In the blockchain, trust is maintained because your transactions or actions are validated by the people in the network. Everyone in the network can view your transactions, provided by giving access to people who can view or who can edit.
Facebook has your data which you might not be aware of. But blockchain will give you ownership of your own data which the Internet failed to do.
We haven't touched the technical side of it, which would need a deep dive. To learn more about blockchain technology and to develop or build applications on top of blockchain, IDS offers a wide variety of Blockchain Courses for working professionals as well as for students. For the learners, we offer in-aligned courses like Certified Blockchain Developers Course, Certified Ethereum Developers Course, Certified Hyperledger Developers Course.
To learn more about the core concepts of blockchain, register on FutureSkills Prime, the technology skilling hub of India and access blockchain courses aligned to industry standards and validated by the Government of India.
Written by Mr. Kishoregoutham KS - Associate Product Manager at IDS