Key Concepts of Blockchain technology

Category: Technology

Blockchain can provide a potential input for every business. But to accompany its full potential, one has to understand its core concepts from scratch. Undoubtedly, blockchain technology will be the future of multiple sectors, so this is a perfect time to dip our toes into it. Definition of blockchain technology Blockchain is a secure, decentralized platform to store any type of data. The data entered in the blockchain cannot be altered or deleted. This technology has various real-time applications in healthcare, voting, finance, banking, and more. Benefits of blockchain technology No one might have chosen blockchain technology if it can't enhance the business. It proves the value of this technology. Here are some of the advantages of blockchain technology. Cuts down third party intervention Low or no transaction costs Nearly impossible to hack Maintains the anonymity of the users Transparent and secure transactions These are a few of the perks of using blockchain technology. Major Key Concepts of Blockchain Technology Are you under-using blockchain technology? Keep an eye on these key concepts to get the most out of blockchain technology. Smart Contracts Smart contracts are the self-executable pre-programmed computer codes that execute when the necessary conditions are met. It is similar to the physical word contracts but is present in a digital format. They are suitable for numerous applications in real estate, finance, banking, insurance, healthcare, and other fields. Smart contracts offer benefits like accuracy, saving time and money, trustworthiness, and security. On the contrary, typical contracts will only consume so much time and have the chance of getting data errors. Consensus The more we deep into blockchain technology, the more we know about the various methods to achieve consensus about transaction validity. Let us learn about two well-known algorithms used in blockchain. Proof of Work (PoW) Proof of Stake (PoS) Proof of Work This is an algorithm-based process where users have to solve puzzles to introduce or create new blocks and confirm transactions. The complexity of the puzzle will vary depending on the number of users present in the network. Proof of Stake Proof of Stake is introduced to overcome the backlogs of PoW. In PoS, anyone can mine using the coins present in their wallet. The miners will be chosen randomly by the network. The possibility of winning is more if a person has more coins than others. Apart from these two algorithms, there is also Proof of Elapsed Time(PoET). In PoET, a person has to get permission to access the network. It ensures fair winning and secure login of the users. Permission Blockchain can be either permission or without permission. If it is a permission-based blockchain, one has to get permission from an authority to validate transactions or create smart contracts. The process is the opposite in permissionless blockchain. Permissionless blockchain uses the Proof of Work concept, whereas permission-based blockchain uses the Proof of Stake concept, enabling faster transactions. Depending on the requirement of the business, a person can choose a suitable blockchain. Blockchain is no longer a future technology as it already has multiple use cases in real-time applications. Now, it is time to adapt to this robust technology. Making such an efficient blockchain might not be easy for individuals or inexperienced workers. In that case, grab some help from a professional crew that offers quality blockchain development services.