By Jagrit Gupta | 6 min read
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Blockchain and Cryptocurrency are thought to be the same, but they should not be mistaken as so. This valuable technology has implications that go far beyond the financial industry. Blockchain is useful for solving society’s most glaring inefficiencies. Issues such as cutting costs, reducing delays, and maintaining the integrity of data need to be addressed. It can be useful to countless industries such as healthcare, real estate and government, in all the best ways.
The demand for Blockchain professionals is increasing rapidly as both government and private industries look for ways to use this versatile technology. All of this hype can make you think, “What is Blockchain?”
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Operating for over 70 years, SPC Group is a technology-focused accounting and advisory firm. Consistently ranked amongst the top Accounting firms in India, SPC is an Indian member firm of PrimeGlobal- An award-winning association of independent accounting firms, comprised of approximately 300 highly successful independent public accounting firms in over 90 countries.
A. What is Blockchain?
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.The term “Blockchain” is made up of two words “Block” and “Chain”. It can also be defined as a chain of blocks containing data.
Blockchain is a peer-to-peer, decentralized distributed ledger technology that makes the records of any digital asset transparent and unchangeable and works without involving any mediator. Blockchain is a type of distributed ledger technology(DLT) in which transactions are recorded with an unchangeable cryptographic signature called a hash, this process is known as Hashing.
B. What makes Blockchain special?
1. Peer to Peer (P2P)
2. Hashing
3. Distributed Ledger Technology(DLT)
1. Peer-to-Peer (P2P) Technology in Blockchain
P2P is a technology that is based on a simple principle, which is the concept of decentralization. The peer-to-peer architecture of blockchain allows all data to be transferred anywhere in the world, without the need of any middle-man, intermediaries or central server.
Blockchain is a decentralized ledger technology that tracks one or more digital assets on a peer-to-peer network. A decentralized peer-to-peer network where all the computers are connected and where each computer maintains an entire copy of the ledger and compares it to other devices to make sure the information is correct. This is how blockchain is different from a bank, where transactions are stored privately and are managed only by the bank.
2. Hashing
Hashing is the process of generating the most important component of a block in blockchain called hashes. The purpose of hashing is to calculate fixed-size output also called digest for the input of any size. The output that comes is purely unique and any change in the input will change the output completely.
- The function used in hashing is known as hash function, it is a one-way function that implies that it is practically impossible to reverse it.
- A cryptographic hash function is used for security purposes and is considered the backbone of crypto security.
- The hash of a transaction helps in identifying transactions on the blockchain
3. Distributed Ledger Technology
Distributed Ledger refers to a database where multiple nodes are there to control, edit and confirm the data entering the database. Changes can be made to the data by both of the parties involved in the transaction without the need of any middlemen.
Decentralized Ledger is different from traditional databases as it does not have any central place to store information. This is the difference between a Decentralized ledger and a traditional database. The decentralization feature provides better security, transparency, and trust among parties using it.
C. Conclusion
Blockchain is one of the most robust and useful technologies currently available and has the potential to solve many problems.This means several industries will start to adopt Blockchain into their businesses. There’s a strong chance that Blockchain will affect your business too. The very big question is “when”?
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