What is Blockchain?

If, for the past few years, you are following banking or cryptocurrency, you must have heard a term ‘blockchain,’ which is also regarded as the record-keeping technology behind bitcoin. You would have probably read that blockchain is a distributed, decentralised, public ledger. The term Blockchain was invented in 2008 to act as the public transaction ledger of the cryptocurrency bitcoin.

For the uninitiated, blockchain represents an increasing list of records which are tied together using cryptography. Each block has a cryptographic hash, a timestamp, and transaction data of the previous block. To put it simply, the words ‘block’ and ‘chain’ generally represent digital information (the ‘block’) that are stored in a public database called ‘chain.’

If using as a distributed ledger, a blockchain is managed by a peer-to-peer network that are bind together by a protocol for inter-node communication and validating new blocks. Once a data has been recorded in a block, it cannot be altered retroactively without altering of all subsequent blocks, which requires consensus of the network majority.

An addition of a block in the blockchain requires four things – a transaction must occur, a transaction must be verified, a transaction must be stored in block and lastly it should contain a hash.

Applications of Blockchain

Apart from storing data about monetary transactions, Blockchain could also help in storing data about property exchanges, stops in a supply chain, etc. Some of the applications include

Banking

Bank is one of the best industry to benefit from blockchain. By incorporating blockchain into banks, transaction can be processed within 10 minutes. With blockchain, banks are also capable to exchange funds between institutions more quickly and securely.

Cryptocurrency

Blockchain forms the basis of cryptocurrencies like Bitcoin. While currencies like US dollar or Australian dollar are regulated and verified by a central authority, blockchain allows Bitcoin and other cryptocurrencies to operate without the need for a central authority, which will further eliminate the need of processing and transaction fees. For developing countries, blockchain based cryptocurrency could have more applications and a wider network of individuals and institutions they can do business with, both domestically and internationally.

Healthcare

One of the growing industries, Health care providers can use blockchain to securely store their patients’ medical records. When a medical record is generated and signed, it can be written into the blockchain, which provides patients with the proof and confidence that the record cannot be changed.