‘Blockchain technology is a term that is frequently associated with cryptocurrencies, but most people seem to have a lot of confusion about what this term actually means. Some people mistakenly think that Blockchain refers to a specific website while others think that is an app. In reality, blockchain is a type of technology that’s used to underpin cryptocurrencies.
So, what is Blockchain Technology?
Blockchain technology is a type of decentralized network technology that’s used for transactions and record-keeping purposes. Blockchain technology is basically a type of database that contains millions of electronic records that are spread out over a wide range of computers. So, Blockchain is basically a type of electronic technology that’s spread over numerous servers and databases.
Decentralized Nature
Blockchain is fundamentally decentralized which means that the data contained within blockchain databases is spread out over numerous networks and servers. In a single blockchain, there will be nodes that contain data. In the event that the data within a single node has been corrupted, then the data contained within thousands of other nodes can be used to correct the corrupted data. Hence, blockchain has a very practical nature from being decentralized and not requiring a single server for storing all information. This is especially important since it makes blockchain particularly beneficial for transaction purposes.
Transparency
Blockchain is extremely transparent since its technological making allows for transactions and activities to be completed through a transparent process that allows all parties involved to be completed easily. This is achieved through having personal nodes or using blockchain explorers which permit any third party to observe the transaction and guarantee its transparency. The content of the transaction, even if it were somehow hacked, could still be traced by blockchain technology. Hence, blockchain is extremely safe and secure when it comes to using for transactions and other purposes.
Uses of Blockchain Technology?
Although blockchain technology is most often associated for use with cryptocurrencies, it can actually be used for a number of other applications as well due to its secure and transparent nature. Some of the uses of blockchain technology include, but are not limited to:
Banking
Blockchain technology has been extensively used by banking and financial institutions due to its secure and transparent nature. It will in fact become one of the most integral features of the banking industry in the near future as many banks continue to incorporate it into their services.
Record Keeping
The secure and transparent nature of blockchain allows it to be an excellent tool for maintaining records related to medical and health care purposes, property management purposes, and for transactions and financial institutions.
Smart Contracts
Blockchain has been extensively used for executing smart contracts between different entities. Since it is a very transparent piece of technology, blockchain can be very easily used for making sure that participants in a contract observe the stated rules and terms within a contract.
In conclusion, blockchain is the technological foundation upon which cryptocurrencies operate due to its highly secure nature, but it is also used for numerous other purposes.