Introduction
Hello Ninjas, We are back with an article based on Cryptography i.e Bitcoin and Blockchain technology. Many people are making a massive amount of money through cryptocurrencies nowadays. However, there has been extensive debate regarding using cryptocurrencies for money-making. That debate is majorly based on two essential terms Bitcoin and Blockchain.
Let's move toward the detailings of both Bitcoin and Blockchain.
Blockchain
A Blockchain is a decentralized, distributed database or ledger implemented in 2000 and developed by Santoshi Nakamoto to store all the records electronically. Because of blockchain technology, the role of cryptocurrency systems, such as Bitcoin, is to maintain a secure and decentralized record of transactions. In simpler words, pieces of data are stored in blocks, and each network node has a replica of the complete database.
It guarantees the security of the data record and generates trust among the users.
Bitcoin and Blockchain technologies are linked together in a certain way.
Blockchain vs Database
Let’s see what are the differences between Blockchain and Database in detail.
| Feature | Blockchain | Database |
| Type | Blockchain is decentralized. | The database is centralized. |
| Security | It is fully confidential | The database is not fully confidential. |
| Speed | Blockchains are slow | Database are fast |
| Operations | It has only insert operation. | It has create, read, update, and delete operations. |
| Store of data | Blockchain stores the data in blocks. | The database stores the data in tables. |
Data in Blockchain
Blocks store some information or data; the first information it will store is relevant information, like for bitcoin, and the relevant information will be the transaction process. The second information that will be stored is hash; now hash can be understood as a unique fingerprint-like in Blockchain, all the data stored in the block will have a unique hash assigned to it. The third information that will be stored in the block will be the prev hash. The prev hash will contain the information of the previous block's hash.
So in this way, all the information or data is secured, updation is easy, and tracking information is easy.
Working of Blockchain
Blockchain follows a multistep process. Let’s see them with the help of the flowchart.
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An authorized individual initiates a transaction which is authenticated by the technology.
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This creates a block which will contain the specific transaction data.
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The block is sent to all the nodes of the system’s network.
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All the authorized nodes verify and certify the transaction block.
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The block is added to the existing blockchain with the help of the hash.
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The transaction is executed finally and the update is distributed across the network.
Note: All these steps take place in real time.
Pros of Blockchain
Some of the pros of Blockchain are:
- It has transparency
- Transactions are secured and private
- Cost reductions by eliminating the third party
- Improved accuracy
Cons of Blockchain
Some of the cons of Blockchain are:
- Transactions are low per second
- Storage space is limited
- Regulation varies by jurisdiction and remains uncertain
Benefits of Blockchains
Here in this section, we will discuss all the benefits Blockchain has.
Reduced Costs
The main benefit of Blockchain has reduced costs because Blockchain eliminates the need for third-party verification, and thus the costs associated with it get reduced.
Greater Security
Once a transaction is recorded in the database, the authenticity of the transaction must be verified by the Blockchain immediately. Thousands of computers on the blockchain rush to confirm whether the details of the recorded transaction are correct or not. So Blockchain provides us with secured transactions.
Efficient transactions
Blockchain works all the time(24 hours in a day, seven days of a week, and 365 days in a year). So transactions can be completed in as little as ten minutes and considered secure after just a few hours.
Transparency
Most Blockchains are entirely open-source software, which means that anyone and everyone can view the code. This means that there is no real authority on who controls the code of Bitcoin or how it is edited, as it gives authority to review cryptocurrencies.
Trustworthy
With Blockchain, you are assured that you will receive accurate and timely data. Your confidential information will not be shared with any random person.
Blockchain's Applications
- Healthcare
- Money Transfer
- Logistics
- Internet of Things
- Smart Contracts
- Voting/ Government
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