Many of you heard about blockchain, but many of you are unaware of its key features and future prospects. Most people know about blockchain because of Bitcoin. Yes, bitcoin is a cryptocurrency or digital currency that works on blockchain technology.
Blockchain was created by an unknown person under the pseudonym of Satoshi Nakamoto. As the name suggests, a blockchain is a chain of blocks that contains information of a specific type of database. Each block contains a number of transactions, and each transaction is documented in the form of a Hash. Hash is a distinctive address assigned to each block during its creation, any kind of modification in the block will lead to a change in its Hash.
Blockchain is a system of recording information that makes it difficult or impossible to change, cheat or hack the system.
In Bitcoin, blockchain is performed in a decentralized way so that no single person or group has control over it —rather, all users collectively retain control. Decentralized blockchains are resistant, which means that the data entered is irreversible. For Bitcoin, this means that transactions are permanently recorded and viewable to anyone.
Following are some features of Blockchain that going to change the future business scenario:
Undoubtedly, immutability is one of the key features of Blockchain technology.
But how is it immune from being corrupted?
Let’s dig deep to explore the connection between immutability and blockchain.
Immutability means something that can’t be altered or changed. This is one of the top blockchain characteristics that aid to make sure that the technology will remain as it is – a permanent and unalterable network. But how does it maintain that way?
Take an example of a banking system, Blockchain technology works slightly differently than typical banking. Instead of depending on centralized authority, it ensures the blockchain attributes through a group of nodes.
Every node on the system is embedded with the digital ledger. To add a transaction, every node is required to check its validity. If the majority of nodes thinks it’s valid, then it’s added to the ledger. This promotes transparency and makes it corruption-proof.
So, without the consent of the majority of nodes, no one can add any new transaction blocks to the ledger.
Another fact that backs up the list of key blockchain features are that once the transaction blocks get added to the ledger, no one can go back and change it. Therefore, any user on the network won’t be able to edit, update or delete it.
How do they do that?
We all know how year by year there is a huge amount of money lost due to hacking through our regular channels. organizations spend Trillions of dollars to protect their business and data from any external or unethical hacks.
In most cases, there is always an internal person’s link in leaking the security measures, so at last, we pay the price for our reliability and trust. As you know all banks are not that trustable now and we need a foolproof mechanism to overcome this situation.
so, when we talk about the hacking-free, corruption-free business environment, you can easily rely on blockchain technology and in recent years it is the most trusted tool we have.
If businesses start to merge blockchain technology with their internal network system no one would be able to corrupt or hack into it and steal the valuable information of the organization.
Public blockchains are a perfect and the most transparent example of it, anybody in the public blockchain can see the transaction and on the other hand, federated or private blockchain could be the best for enterprises that want to remain crystal clear among staff and protect their sensitive information.
The network is decentralized meaning, the network framework is not governed or regulated by a single person or authority. In the place of this, a group of nodes maintain the network and make it decentralized.
This is also one of the immensely powerful qualities or features of blockchain technology.
Blockchain places users in an effortless position and puts them in a system that doesn’t require any control authority and we can directly access it from the web or app and store our intangible assets there.
We can store anything starting from important documents, contracts, cryptocurrencies, or other useful digital assets.
We also access and through blockchain, you will have direct authority over them using your private key or password. So, it seems that by decentralizing the process, we are giving direct control or authority to common people to use their power and rights on their assets.
How this blockchain technology feature is truly changing the scenario:-
- Less Failure: Blockchain is a very organized technology, and as it doesn’t depend on human calculations it is highly faultless. So, the chance of this system failure is a rare phenomenon.
- No Third-Party: decentralization of the system makes blockchain less reliable on third parties or companies. This means no third party, no risk.
- Fewer chances of fraud: As the system runs on algorithms, there is no chance for people to make fraud with you. No one can make use of blockchain for their personal advantage.
- Controlled by the user: With decentralization, users now have control over their properties. They don’t have to depend on a third party or third person to maintain their assets. They can do it by themselves without any help.
- Transparency: Blockchain technology designs a transparent profile of every party. Every change on the blockchain is easily viewable and that makes it more conceptual.
- Less vulnerable: As decentralized is one of the key features of blockchain technology, it can survive any vicious attack. Due to this, attacking the system is more expensive and complex for hackers and not an easy solution. So, it is less expected to break down.
- Veritable Nature: The genuine nature of the system makes it a distinctive kind of system for every person, and hackers will have a tough time cracking it.
3. Distributed Ledgers
Generally, a public ledger will provide every piece of information about a transaction and the participant involved in it. It is all out and opens, no one can hide it. Although in the case of private or federated blockchain, it is a bit dissimilar. But still, in those cases, many people can see what really goes on in the ledger.
That is because the ledger on the network is supported and maintained by all other users on the system. This distributes the computation power across the users to ensure better results.
This is the reason it is considered one of the blockchain’s vital features. The outcome will always be a higher efficient and well-planned ledger system that can take on the traditional ones.
Why It’s One of the Blockchain Important Features?
- Verification of Ownership: nodes act as verifiers and establish confirmation of the ledger. If a user requires to add a new block in the system, other users would have to verify the transaction and then grant the go-ahead before processing the transaction. This provides the user with equal and fair participation.
- No resentful Changes: Distributed ledger responds really well and efficiently to any tampering or suspicious activity. No one can hamper the ledger, as everything has been tracked quite easily and updated really fast.
- Ownership: To make the blockchain features work well, every active node has to feed and maintain the ledger and participate in the validation of the transaction.
- Equal power and rights: All participants on the network are equivalent and one can get any special favors. Everyone has to go through the regular channels to add their blocks. It’s not like you, some of the parties have more power and special right to mold things according to them, everyone is equal and has the same right in the system.
- Quick Reaction: As mentioned earlier also, removing the third-party speeds up the system response, any change in the ledger is updated in a few seconds only!
4. Strengthen security
As it is free and unchained from the central authority, no one can just simply change any attribute of the network for their well-being. Using encryption guarantees another layer of security for the structure.
But what makes it provide so much security and reliability as compared to other existing technologies?
Well, it’s extremely secure and reliable because it presents a special disguise Cryptography.
Accompanied with decentralization, cryptography set another layer of defence for users. Cryptography is a complex and intricate mathematical algorithm that acts as a firewall for attacks and only those for whom it is purposefully built can read and process it.
Every information put into the blockchain is hashed cryptographically. In other words, the information on the network hides the true nature and source of the data. In this process, any input data gets through a mathematical algorithm that produces a different kind of value, but the length is always fixed.
It provides a unique identification for every data. Every single block in the ledger comes with a unique hash of its own and contains the Hash of the previous block. So, trying to tamper or change the data will mean changing all the hash IDs. And that is kind of impossible.
You must have a private key to access the data and a public key to make transactions.
Hashing is permanent and Irreversible
Hashing is relatively a complex method, and it is totally impossible to reverse or alter it. No one can take a private key and come up with a public key. Also, a single change in the input of a hashing method could lead to a completely different ID, so small changes aren’t a luxury in the system.
If anyone wants to manipulate or corrupt the network, he would have to convert every data stored in every node in the network. There could be millions of people, where everyone has the same copy of the ledger. Approaching and hacking millions of computer systems is next to impossible.
That’s why it is considered to be one of the best blockchain features. As it is too hard to dodge, you won’t have to worry about hackers and the security of all your digital assets.
5. Swift Settlement
Traditional banking systems are a bit slow. Sometimes it can take days to process a transaction even after the finalization of all settlements are done. It also can be manipulated or corrupted quite easily. Blockchain offers a high-speed settlement compared to traditional banking systems. In this way, a user can transfer money and avail of other facilities much faster, which saves a lot of time and funds in the long run.
These blockchain features make the life of foreign working peoples much easier, many people travel to other countries in the search of good jobs and better life, however, sending money to their families in their home country is a priority for them. In conventional ways, this process takes lots of time and could become fatal in times of need.
Now, Blockchain technology makes this process tremendously fast and secure and they can easily send money to their loved ones.
Another example is the smart contract system, this can allow making faster and secure settlements for any kind of contract easily. This is one of the key benefits of blockchain features these days. And because of the non-involvement of third parties, people can send money with a minimal fee.
Blockchain has also given its immense benefits to the international trades too! So, why shouldn’t we use blockchain? However, there are some cases where the network struggles and faces issues to support too many users and traffic, and this leads to slow settlement. Even so, many are improving this scenario, and we’ll soon see a better take on the issue.
6. Consensus Among Participants
Every blockchain has thriving qualities because of the consensus algorithms. The architecture of the technology is brilliantly designed, and consensus algorithms are the center point of this architecture. Every blockchain has a consensus to help the network make the finest decisions.
In other words, the consensus is a decision-making process and a point of agreement for the group of nodes active on the network. Here, the nodes can come to an agreement easily, quickly, and comparatively faster. When millions of nodes are active for validating a transaction, an agreement or consensus is completely necessary for a system to run smoothly and steadily. You could consider it as kind of a voting system, where the majority wins, and the minority has to support it.
Nodes might not trust each other, but they can trust the algorithms that run at the core of it. That’s why every decision on the network is a winning scenario for the blockchain.
There are lots of different consensus algorithms for blockchains all over the world. Each has its unique way to make decisions and correct previously conducted mistakes. The architecture creates a domain of goodness on the web.
Although, to keep the decentralization going every blockchain must have a consensus algorithm, or else the core value of it is lost.