Blockchain is the brand new database technology that powers nearly all cryptocurrencies.It makes it very difficult to hack or cheat the system by distributing identical copies of a database across an entire network.
Web 3.0, a concept for a future version of the World Wide Web that is built on the blockchain and involves decentralisation and token-based economics.
A blockchain is growing list of records, known as blocks, that are linked together using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. The timestamp proves that the transaction data existed at the time the block was published in order for it to be hashed.Because each block contains information about the one before it, they form a chain, with each additional block reinforcing the ones before it.
As a result, blockchains are resistant to data modification because, once recorded, the data in any given block cannot be altered retroactively without affecting all subsequent blocks. It can keep track of cryptocurrency transactions, NFT ownership, and DeFi smart contracts.
While any traditional database can hold this type of data, blockchain stands out because it is completely decentralised. Many identical copies of a blockchain database are held on various computers scattered across a network, rather than being maintained in one spot by a centralised administrator—think of an Excel spreadsheet or a bank database. Nodes are the individual computers that make up the connection.
A perfect comparison for understanding blockchain technology is a Google Doc.When we create a document and share it with individuals, instead of being duplicated or transferred.This provides a decentralised distribution chain in which everyone has an access to the document simultaneously. No one is logged out while waiting for another person to make changes, and all changes to the document are done in real-time, making them entirely transparent.
Types of Blockchain
Currently, there are at least four different types of blockchain networks: public, private, side, and hybrid.
There are no access restrictions on a public blockchain. Anyone with an Internet connection can send transactions to it and participate as a validator. Typically, such networks provide economic incentives to those who secure them and use a Proof of Stake or Proof of Work algorithm.
Bitcoin and Ethereum are two of the most well-known public blockchains.
Private blockchain is one that has been granted permission for the access. It is only open to those who have been invited by the network administrators. Access to participants and validators is restricted. To differentiate open blockchains from other peer-to-peer decentralised database applications ,the term Distributed Ledger (DLT) is typically used for private blockchains.
Hybrid blockchain is one that combines centralised and decentralised features.The chain’s exact operation depends on which parts of centralisation and decentralisation are used.
Side chain is a ledger that runs concurrently with a primary blockchain. Entries from the main blockchain can be linked to and from the side chain, allowing the side chain to function independently.
We only touched the surface of blockchain industry-wide. Blockchain is a promising and revolutionary technology because it reduces risk, eliminates fraud, and increases transparency in a scalable manner for a wide range of applications. Currently, cryptocurrency is the most popular application . The opportunities in this field are expanding at a rapid pace. Being one step ahead of the competition is always a good strategy for any business.