What is Blockchain Technology

Blockchain Technology

A Blockchain is a type of database used for digital ledger. It is distributed over a computer network. Blockchain stires information in digital format. The best example is Crypto currency is being utilized through the Blockchain Technology.

Blockchain is identified as a technology or concept that has helped in revolutionizing the activities carried out in the digital world. It ideally contributes in enhancing the level of trust between the parties involved in a transaction.

In the Blockchain, the data are structured and kept in groups or known as blocks. Each block have their own storage capacity and each block is linked to an another block through a logical chain. Each block in the chain have their own timestamp. Each of the different data blocks are  secured and also linked to each other based on the application of cryptographic rules or chains.

Components of a Block

In Blockchain, the block is divided in to two parts such as Header & Body.

Header in the block contains the identity of the block, transaction information, hashing of previous block header and timestamp. In body the transaction data is basically stored in a structural form in a tree format with different types of nodes.

In Case of traditional database, all data are connected and stored to a centralized database or location. But in case of Blockchain, all data are interconnected and decentralized. So in traditional database, if one node fails the entire database becomes inaccessible whereas, in Blockchain if one or more nodes fail, still the database remains accessible.

Another prime component of Blockchain is Distributed Ledger. The Distributed Ledger is known as a database that has its presence across diverse locations and thereby is used by

large number of users. This Distributed Ledger in comparison to Centralized Ledger operates in decentralized manner. The files stored in the distributed ledger have their own timestamp and are also embedded with an unique cryptographically designed signature.

Presently the Blockchain Technology is used at multiple areas such as in Dispute Management, Policy impositions, Tax Management, Creation of data repository, Financial Transaction processing, Management of rules, Electoral or voting process, Medical records management, Land records, Education, certificate issuance.

In India, Government at many states have started implementing blockchain at many sectors. Below is a referral image from twitter.

Advantages of using Blockchain

• Transaction Transparency
• Not a single point of failure
• Collaboration
• Audit supporting
• Reliability

Risk

There is one risk associated with the Distributed Ledger Technology (DLT) i.e. Cyber Risk. As this system does not spontaneously check and rectify the storage of data sets, there are possible many incorrect data being stored in the system. These incorrect data tends to weaken the system and can lead to data leak in case of cyber attack occurs. 

-DR