What is Blockchain Technology, How Does It Work? and Its Advantages

In 1991, a group of researchers presented blockchain technology, but it received little attention. We can save our data without worrying about security. In 2009 with the use of blockchain technology, bitcoin has introduced. The way that every company now manages data, finances, and information has changed because of technology.

A blockchain database has made up of two records: transactions and blocks. The first block contains a header and data about transactions that occurred during a specific time. The blocks have assisted in the hash’s development, which is an alphanumeric string. After the first set of blocks is formed, each consecutive block in the ledge calculates its hash using the previous block’s hash.

How does Blockchain technology work:

For example, when one individual pays money to another. A block is a representation of an online transaction. Every party in the network receives the block. The network verified whether or not the transaction was genuine. The transaction chain also includes the blocks, which keep track of all the transactions. As a result of this procedure, another person has now got money.

Blockchain Platform:

There are permissionless and permissioned blockchain platforms.

1. Bitcoin is a permissionless blockchain, meaning that every node in the network can conduct transactions and participate in the validation process.
2. Multichain is a permissioned chain on a private network, where each node initiates a transaction and participates in the validation process limited to a small number of permitted nodes.

Advantages:

1. The benefit of blockchain technology is security.
2. It is a payment platform for the frontier market.
3. It lowers the cost of transactions.
4. It is a transaction completed more quickly
5. It’s a network that the users can control.

Disadvantages:

1. Blockchain technology comes at a cost in terms of ecology.
2. A lack of regulation has created a dangerous situation.
3. A Distributed Computing System is not the same as Blockchain.

To conclude, Blockchain is a relatively new term in technology, but it is one to remember. This technology has achieved enormous popularity even in its early stages. Every day that passes brings the discovery and assessment of new application areas. Technology will alter how we live today once it is widely adopted and used.