Before talking about blockchain technology it is wise to first understand what is not blockchain technology. Most of us associate blockchain with cryptocurrency but it is not a cryptocurrency, neither is it a programming language nor a python library.
Now that we got that out of the way let’s look at the actual definition of blockchain technology. According to IBM, blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. In other words, this technology is a sequence of blocks or groups of transactions that are chained together and distributed among the users.
Point to be noted that blockchain does not only store transactions, it can save any kind of information without compromising the authenticity and integrity of the data.
Blockchain has its origin dated from 1991 when Scott and Stornetta published their article in the Journal of Cryptography, “How to Time-Stamp a Digital Document”. However, its use was popularized much later due to the success of Bitcoin and other cryptocurrencies in the late 2000s.
Why was it created?
Economic instruments such as banks have emerged to facilitate trade between buyers and sellers through coins, paper money, and/or letter of credit. Even though technological innovations such as credit card systems have improved the speed and efficiency of such transactions, many business transactions remain expensive, vulnerable, and inefficient.
In order to mitigate these challenges, a faster payment network was needed which would establish trust, require no specialized equipment, have no chargebacks or monthly fees, and offer a collective bookkeeping solution for ensuring transparency and trust.
Bitcoin is the digital currency that was launched in 2009 by Satoshi Nakamoto (pseudonym). Even though the true identity of the person/persons is still unknown but unlike traditional
currencies, Bitcoin does not have any central authority. The technology uses a peer-to-peer network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally signed messages to the network using bitcoin cryptocurrency wallet software.
Blockchain has transformed financial transactions. It has tremendous potential for enterprises with better scope for scalability. Through its cost-benefit features, it has the means to
change the way we perceive financial transactions. By eliminating intermediaries and providing a secure platform it is challenging our current financial structure.
In addition, the technology is also spreading through other industries, and its uses are expected to grow even more in the near future.
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