Over the past few years, the hype of technologies like cryptocurrencies, bitcoin and blockchain has peaked. You might have also heard about it a quite few times. If not, you might be wondering “What are Blockchain technology and cryptocurrency? How is it possible for digital currencies to have such a high value in the world of high risk of cybersecurity?”

As the day passes, this technology seems more interesting and promising to have a great impact on the lives of those wanting to benefit via technology. So in this article, we will work on giving you the basics of technology and its working mechanism so that the next time someone talks about blockchain, you will be the expert.

What is Blockchain Technology?

Blockchain as the name suggests is the composition of block and chain. But what is “Block” and “Chain”? The base of blockchain technology is to store transactional records on Block on a network of computers through peer-to-peer nodes making a Chain.

So, Blockchain is a secure and immutable record-keeping method that is difficult or nearly impossible to hack or manipulate. What makes this technology so secure? Unlike the traditional database, this technology duplicates and distributes the records to all the computers in a blockchain. All the copies will be updated and validated simultaneously to prevent a single point of failure.

Key Features of Blockchain Technology

Now, that you are one step closer to knowing blockchain technology, it is time to explore its key features that make this technology unique from the rest.

Decentralization

Decentralization is what attracts most of the tech enthusiasts to this technology. This technology works on a distributor ledger, unlike traditional databases where central authorities like banks handle, update and validate transactions. This means automatic trust and transparency across the blockchain network.

Secure and Immutable

To enhance the security and immutability of this technology, cryptographic algorithms play a very crucial role. Remember when you talked about how transactional blocks are interlinked in a chain? The chains in the network are connected by cryptographic hashes. What does that hash do? If you want to temper or hack the system, you will have to alter every subsequent block in a blockchain making it practically impossible. So, this technology is perfect for securing your sensitive data and transactions.

Smart Contracts

Another exciting feature of this technology is its smart contract. It is an automated contract stored in a blockchain network. These contracts execute automatically when the terms and contracts are met. So with this technology, you won’t need a middleman to streamline a transaction resulting in time savings and fast closing time. 

How Does Blockchain Technology Work?

Now, that we are clear on what blockchain technology is and the reasons behind its popularity, let’s jump into its working mechanism too. Is it complex technology like you think or it's a simple addition? What are the reasons behind its strength and uniqueness?

Blockchain is a perfect combination of main two impressive technologies and they are:

1. Cryptographic Keys,

2. A Peer-to-peer Network.

Cryptographic keys are two keys that are provided to every authorized user in a network. These two keys are the Public Key and the Private Key. These keys are crucial to establish a transaction in a blockchain network. A private key is for personal use whereas the public key is shared with other blocks in the network. This identity in the blockchain is known as a “Digital Signature”.

The integration of digital signatures with peer-to-peer network connections with the different nodes creates magic in this technology. Authorized individuals in the network use digital signatures to reach a consensus on transactions or other activities within the chain. When your deal is authorized, mathematical verification will help you secure, immutable and transparent transactions.

Bitcoin Vs Blockchain

Although you might think Bitcoin and blockchain as the same it’s not. There are several significant differences between them and they are:

What are they: Bitcoin is a digital currency whereas blockchain is a distributed digital ledger.

Main Aim: Bitcoin is used to avoid government restrictions for smooth transactions. Blockchain’s main aim is to reduce the cost and time for secure transactions.

Trade: Blockchain can be used to transfer anything from currency to property rights stocks but Bitcoin is limited to currency.

Scope: The scope of Bitcoin is limited whereas Blockchain is more adaptable and flexible to changes, so its scope is unlimited. 

Pros and Cons of Blockchain Technology

Sure, there are numerous positives that we can expect with this technology. It has already played a crucial role in the security and transparency of data and transactions. Most industries like healthcare, Banking, Real estate, Supply chain management, government, and voting are being benefited from this technology.

But, there are some negative aspects too. So let's pinpoint the advantages and disadvantages of blockchain technology.

Advantages of Blockchain Development:

• Decentralized,
• Transparent,
• Immutable,
• Enhanced Security and Confidentiality,
• No single point of failure,
• Censorship Resistance.

Disadvantages of Blockchain Development:

• Blockchain is comparatively slower than traditional databases,
• Implementation cost is higher comparatively,
• Complex Data Modification,
• Uncertain Regulation.

Our Blockchain Solutions Development Service

Impressed by how blockchain works and want to integrate this technology into your existing software or want to build a new one from scratch? Coincidently, your objective and our expertise met here.

We are a software development solution that is proficient and experienced in integrating and developing blockchain solutions. Our pool of blockchain developers is always ready to commit to a successful project execution.

Our expertise lies on:

• Decentralized App(dApp) Development,

• Blockchain Consulting and Strategy,

• Smart Contract Development,

• Tokenization and Initial Coin Offering (ICOs),

• Blockchain Integration and Inter-operability,

• Blockchain Security Audit and Consulting.

Check our Blockchain development service page to get to know our services in detail. If you find ourself qualified enough to take responsibility for your project and transform your blockchain dream into reality, feel free to contact us.