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Basics of Blockchain Technology

Blockchain technology has gained popularity in recent times. This article covers some of the fundamental concepts associated with it, including:

What is blockchain?

Why do we need blockchain?

How does blockchain ensure trust?

Who invented it?

When to use it?

When not to use it?

So, let’s get started.

What is blockchain?

In simple terms, blockchain refers to a chain of blocks. Blocks, in turn, contain vital information, such as transaction details, participants, and unique data about that block. Thus, a block acts as a digital information holder.

Why do we need this blockchain?

Blockchain is like a ledger or a record keeping book. Problem with record keeping book is that anyone can steal it or modify it. However, blockchain overcomes this problem.

How does blockchain ensure trust?

Blockchain operates like a distributed ledger, meaning that instead of a single entity owning it, it is collectively owned. As a result, consensus of the majority is required to change or update the information on a block. Additionally, once the data has been written on a block, it cannot be modified retroactively.

Who invented it?

Satoshi Nakamoto, a person whose identity remains unknown, invented blockchain in 2008.

When to use it?

Blockchain technology is useful when there is a need for decentralization or a shared ledger/database.

When not to use it?

Since transactions take time and consume significant resources in blockchain, it is not recommended for applications that require faster performance.

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