🔰Blockchain 100x

What is blockchain technology?

Blockchain technology is an advanced database engine that enables the transparent sharing of information across a company's network. A blockchain database stores data in interconnected blocks in a chain. The data is chronologically consistent because you cannot delete or modify the chain without network consensus. As a result, you can use blockchain technology to create an unalterable or immutable ledger to monitor orders, payments, accounts, and other transactions. The system has built-in mechanisms that prevent unauthorized transaction entries and create consistency in the shared view of those transactions.

Why is blockchain technology important?

Traditional database technologies pose several challenges for recording financial transactions. For example, consider the sale of a property. After payment is made, the property is transferred to the buyer. Both the buyer and the seller can record the monetary transactions, but neither can be fully trusted. The seller can claim that he did not receive the money, even if he did, and the buyer can similarly claim to have made the payment, even if he did not.

To avoid legal problems, a trusted third party needs to supervise and validate the transactions. The presence of this central authority not only complicates the transaction, but also creates a single point of vulnerability. If the central database is compromised, both parties are affected.

Blockchain reduces these problems by creating a decentralized, tamper-proof system to record transactions. In the context of real estate transactions, blockchain creates one ledger, i.e. one record, for the buyer and another for the seller. All transactions must be approved by both parties and are automatically updated in both ledgers in real time. If any historical transaction data is corrupted, this affects the entire ledger. These features of blockchain technology have led to its adoption in various industries, including in the creation of digital currencies such as Bitcoin.

What are the features of blockchain technology?

Blockchain technology mainly relies on the following features:

• Decentralization - Decentralization in blockchain refers to the transfer of control and decisions from a centralized entity (individual, organization, or group) to a distributed network. Decentralized blockchain networks use transparency to reduce the need for trust between participants. These networks also prevent participants from exercising authority or control over each other in ways that compromise the functionality of the network.

• Immutability - Immutability means something that cannot be changed or altered. No participant can violate a transaction after someone else records it in the shared ledger. If a transaction record is in error, you must add a new transaction to reverse it, and both transactions will be visible on the network.

• Consensus - A blockchain system establishes rules about participants' consent to record transactions. You can only register new transactions when a majority of the participants in the network have given their consent.