Technological advancements have ensured that there are various methods of payments online, besides storing data. Many still struggle to understand the term “blockchain”, which is basically a method to store data individually and distribute it, but not copy.
In simpler terms, the blockchain network allows a person to update and regulate data without changing the content or copying the same, therefore allowing for the individuality of the source. The data or the information is regularly and instantly updates, and stored at multiple locations, making it almost impossible to hack, as the same data is on multiple locations, making it an impossible task to erase, and ensuring security for the blockchain industry.
Why has the process been named blockchain?
It is important to understand, why it has been named blockchain. The blockchain industry can be daunting and complicated for first time Bitcoin owners. To simplify matters, it has been explained in layman’s terms.
A block is created as a record of new transactions; when the block has been completed, or in other words, the transaction has been completed, that block is added to the chain, with other blocks. Each individual Bitcoin owner will have an address to the saved transactional data on the chain, to which they shall have a complex, encrypted key for their own data location, which is what blockchain means.
For instance, if two parties are involved in a cryptocurrency transaction without a governing body, it is very difficult to monitor the payments, by the sender, as well as the receiver. With blockchain users, the term data ledgers are used frequently; these data ledgers store entries to the transactions, which have been conducted by the initiator and the recipient, and with both parties having access to it. This means that there is no third-party involved, as with regular transactions, the banks act as the third party regulating and monitoring the payments.
Blockchain industry security
As blockchain deals with sensitive information without a regulating body, it is crucial for the longevity of the system that the privacy of the ownership and security of the transaction should be maintained at all times. This is mostly achieved through encryption of the data, and of course, the fact that the blockchain data ledger is immutable.
The data ledger for the blockchain industry records every transaction that has ever been conducted; the transactional data gets verified, uploaded, then saved and secured by anyone that is on that particular blockchain network.
The blockchain network security is ensured by algorithms; the algorithms have to be approved by 51 percent of the consensus to have the transactional data added to that network. Once it has been added, it can never be replaced or removed. The main difference between regular online payments and the blockchain network is the fact that blockchain relies solely on the algorithms, whereas the conventional modes of payments are verified by the third-parties, which are essentially the banking networks and third-party establishments. Therefore, choosing the security of the payments with cryptocurrencies is a choice of choosing between banks or mathematically proven algorithms. How to create a social network with good protection?
Immutability of the blockchain network
Although it is commonly touted as an immutable blockchain network, there is no guarantee of such a thing. As with any other network, blockchain can also be modified with enough effort, although extremely improbable. This is because the person trying to modify the chain is required to be controlling, more than fifty-one percent of the devices of that distributed ledger network. That is not all, as the modifier will also need to complete the modification within ten minutes of gaining control of 51 percent of the computers. Not only is this very difficult, but it is also yet to happen.
The advantages of a blockchain industry
There are many advantages of using this technology, although it is still considered to be new and complicated by most. Although it greatly simplifies and cancels the dependency on third parties for verification, it is still complicated with many confused as to how it works and what happens in case of the wrong transaction.
In case of wrong transactions, the rejected transaction will not show up in the network, as it was never approved, to begin with. However, it is prudent to note, that in case of wrong payment, going to a person it was never meant to reach, it can be reversed by the person who has received the funds. This is one reason that Bitcoin transactions should not be done with unknown entities or persons.
The structure of the blockchain data is appended only, which means that it cannot be altered or modified by other parties, which is one of the many advantages of the blockchain industry. Also, the transaction is times stamped and put in chronological order so that each transaction is recorded as per the date and time of the approval.
The data ledger is always distributed amongst all the users in that blockchain network, making it a decentralized; this is good news, as it means that the data cannot be lost at any point, and can always be retrieved.
The origin of the data ledger can be tracked, showing clearly the starting point along the chain. Transparent transactions for these payments means that all individuals who are part of that network can view all the transactions on the network.
Is this the best news in the industry?
While many are still hesitant about using the unregulated system, there are many others who are claiming the benefits of using digital systems. Bitcoin is seen as an experimental and new currency, and although greatly appealing to a lot of people, it is still ridden with challenges and hurdles that are unforeseen by the Bitcoin industry. As this is yet to be an official mode of payments in most countries, it is severely under-regulated, making it prone to accidents and problems which most are unsure about; also most regulatory systems and governments will require one to pay tax on Bitcoins, although this may vary by the country. But how can you protect cryptocurrency exchange script with blockchain?
What is your take on the blockchain industry? Do you think it is a sustainable option that may be cleared by the regulatory bodies in various countries? Share your point of view with us for this discussion.