What is blockchain technology in simple terms?

what is blockchain technology in simple terms?

When you hear about the blockchain, it can be very difficult to figure out what this really is, what it does and how it can help you. We are here to assist you in understanding what the blockchain is about and how this unique technology has the potential to change our life in ways you wouldn’t even imagine. Let’s find out more.

What is the blockchain?

The blockchain is, as its name suggests a chain of blocks that are made of digital information pieces. These blocks are storing transaction information like dollar amount, time and date. They also store information about who was a part of the transaction, but instead of names they use digital signatures or usernames.

Every block has a hash code that makes it stand out. These hashes are cryptographic codes designed by specialized algorithms. Each block can store 1 MB of data, so instead of a single transaction, the block can keep hundreds or even thousands of transactions in a single place.

How does the blockchain work?

Each time a block stores new data, it’s included in the blockchain, which is a collection of data blocks strung together. But not every block can be added to the blockchain. Instead, 4 things need to happen. A transaction needs to take place, and that transaction also needs to be verified. The transaction needs to be stored in the block and then the block needs to receive a hash.

Can the transactions be reversed?

No, because every transaction is anonymous, you will never know the two originating parties for more than their username. As a result, you are unable to reverse or even cancel any kind of blockchain transaction. That’s why you need to make sure that all the transactions are correct and valid from the start.

Centralized vs decentralized structure

Centralized information is stored on a server. That means someone owns and stores the data, which also makes it easier to hack. Decentralized content on the other hand is usually in the cloud or the blockchain, it can be very hard to access, and it’s definitely a challenge to remove it or modify it. Which is why the decentralized structure is better. It prevents any type of manipulation, while still making sure that all the content is stored adequately and new information can arise without any problems.

Is the blockchain safe?

While nothing is 100% secure online, the blockchain is said to be quite safe. But there are some elements that present vulnerabilities, so even then, there are some challenges that can appear.

One thing is certain, the blockchain can help store a lot of transaction data, it’s dependable and it does bring in front a lot of potential. It’s dependable and with its help, we can finally make transactions faster and more reliable. There’s less bureaucracy involved, instead you can just focus on getting the best possible results and experience. That’s why it makes a lot of sense to rely on the blockchain, and many companies follow suit!

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