What is blockchain and what are its technological applications?
There are many questions about what blockchain is and what it is used for. In this article, we will try to answer the main queries concerning the blockchain. Are you interested? Keep reading!
What is blockchain?
Blockchain is a data-logging technology that has gained relevance in recent years. In short, it is a public, decentralised record of transactions that is stored on different computers.
Each transaction is grouped into a “block”, linking to the previous transaction. In this way, a continuous blockchain is created, ensuring the integrity and security of the data. Security is ensured because any attempt to modify a transaction in a block would involve modifying each and every one of the following blocks, which is almost impossible due to the decentralisation of the network.
What is blockchain for?
Blockchain can be used for a wide variety of things, the best known being its function as a secure database for cryptocurrencies.
Cryptocurrencies like Bitcoin or Etherum are now the order of the day. Cryptocurrencies use blockchain to record all transactions and thus make sure there are no scams or fraud.
However, blockchain applications go far beyond cryptocurrency protection. Blockchain is used to ensure data integrity, track ownership of digital assets, simplify authenticity verification of different products and much more.
What are the main technological applications of blockchain?
Blockchain has a wide variety of technological applications that are transforming entire industries. The main ones are the following:
#1 Cryptocurrencies
Cryptocurrencies are one of the most well-known applications of blockchain. As we have said before, it ensures the security of transactions without the need for financial intermediaries.
#2 Smart contracts
Smart contracts are autonomous computer programs that are automatically executed when certain conditions defined above are met. They are used in many areas, from finance to logistics and legal matters.
#3 Identity management
Blockchain allows people to take control over their own identity on the Internet, improving their online security and privacy. Individuals can share information and revoke access to it at any time.
#4 Supply chain
Tracking products along the supply chain has been more transparent and efficient since the emergence of blockchain, as it is useful to ensure the authenticity of products and detect their origin.
#5 Electronic voting
The use of blockchain in electronic voting systems improves the integrity and transparency of elections, reducing the risk of fraud.
#6 Medical records
The blockchain allows patients to have more stable control over their medical records, ensuring that healthcare professionals have access to such information when needed.
5 Advantages of blockchain
The main advantages of blockchain are as follows:
- Security. Blockchain is very resistant to cyberattacks and is a very secure tool for storing sensitive data.
- Transparency. All transactions are public and verifiable, increasing trust in operations.
- Elimination of intermediaries. Particularly beneficial in the financial field.
- Immutability of data. When the transition is recorded on the blockchain, it is almost impossible to delete or change it.
- Efficiency and speed. Blockchain transactions can be processed very efficiently and more quickly than traditional ones.
Types of blockchain
There are different types of blockchain, and they can be classified into three categories:
- Public blockchain. On public blockchains, anyone can join the network. A popular example of a public blockchain would be Bitcoin. It is transparent and decentralised, although it can be slower and more expensive.
- Private blockchain. Private blockchain is managed by a specific entity. They are more efficient and faster, but they may be less transparent than public ones.
- Consortium blockchain. They represent an intermediate point between public and private blockchain. It is common in business applications, ensuring greater efficiency without renouncing decentralisation in its entirety.
- You may be interested in: “Why you need to use Artificial Intelligence in your company?”
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