Blockchain Technology : Innovation in Digital Currency Transactions

What is Blockchain ?

A Blockchain is a decentralized and distributed digital ledger of all Cryptocurrency that is used to record transactions across many computers (nodes) so that the records cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.

A blockchain is a continously growing list of records, called blocks, which are linked and secured using cryptography. Blockchain removes the need for a third party intermediary to facilitate transactions of value, while also adding layer of anonymity. Blockchain technlogy is not just useful for creating digital currencies such as Bitcoins but can be used for a variety of applications such as tracking ownership or the provenance of documents, digital assets, physical assets or voting rights.

Who Invented Blockchain Technology ?

The idea behind blockchain technology can be traced to 1991 when Stuart Haber and W. Scott Stornetta first described the work on cryptographically secured chain of blocks. In 1992, they incorporated Merckle trees into the deisgn allowing several documents collected into blocks.

However, block chain technology as we know of today has gained its significance from 2008 when a pseudonymous Satoshi Nakamoto Published the Bitcoin white paper for the first time. Satoshi Nakamoto gave practical impetus to block chain technology and solved the problem of double spending.

How does Blockchain Technology Works ?

The blockchain is a undeniably ingenious invention as it allow digital information to be distributed not copied. Originally blockchain technology is devised for digital currency, Bitcoin tranasctions.


Bitcoin has been called "digital gold", and to date the total value of the currency is close to $9 billion US.The most known and discussed application of the blockchain technology is called Bitcoin.

"Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate."

When a new online transaction or an edit to an existing transaction comes into a blockchain, majority of the nodes (here computers) within a blockchain implementation execute algorithms to evaluate and verify the history of the individual blockchain block that is proposed. If a majority of the nodes come to a consensus that the history and signature is valid, the new block of transaction is accepted into the ledger and a new block is added to the chain of transactions. If a majority does not concede to the addition or modification of the ledger entry, it is denied and not added to the chain.

Features of Blockchain Technology :

1. A distributed database

Information that is stored as spread sheets in blockchain database isn't stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for the hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the intrenet

2. Durability and robustness

By storing blocks of information that are identical across its network, the blockchain cannot:

• Be controlled by any single entity.
• Has no single point of failure.

It brings highest degree of accountability, no more missed transactions, human or machine errors.

3. Transparent and incorruptible

The blockchain technology works in a state of consensus, one that automatically checks in with itself every ten minutes. 

• Transparency data is embedded within the network as a whole and public.
• Incorruptible Hacker could not corrupt because this works with huge network of nodes.

4. Decentralization

Decentralization means the network operates on a user-to-user(or peer-to-peer) basis. There is no point where the transaction is initiates as the whole blockchain system works on multiple nodes.

5. Increased capacity

One of the remarkable things about peer-to-peer technology is that they can increase the capacity of an entire network. Having thousands of computers working together as a whole can have a greater capacity than a fewer computers.

6. Immutability

One of the main value proposition for blockchain is creating immutable ledgers. Any centralized database can be corrupted, but in blockchains hashing keep the data secure.

7. Fast settlement

Traditional international banking is very slow, taking days to process transactions. This is the reason many financial institutions looking forward to upgrade their financial system. Blockchain can settle transactions at near instant time. This could save time and money for the entire financial industry.

8. Better security

Blockchains are secured by many computers that run nodes and confirm transactions on the networks.

Types of Blockchains :

There are three types of Blockchains that have merged after Bitcoin introduced Blockchain to the world. They are

1. Public Blockchains
2. Private Blockchains and
3. Consortium or Federated Blockchains

There are other complicated type Blockchains like public-permissioned Blockchais and private-permissioned Blockchains, but we discuss about above mentioned types here.

1. Public Blockchains

As the name suggests it is - ' for the people, by the people and the people '. Here no one is charge anyone can participate in reading/writing/auditing blockchain.

Eg : Bitcoin / Litecoin - Anyone can make transactions with Bitcoins and start mining.

2. Private Blockchains

Private blockchains as its name suggests is a private property of an individual or an organization.

There is a in charge who looks after of important things such as read/write or whom to give selectively to read/write and vice versa.

Eg : Bankchain - Anyone can't make transaction and mining.

3. Consortium or Federated Blockchains

Here instead of one in charge, we have group of people/organizations or representative individuals coming together and making decisions for the best benefits of the whole network.

Eg : EWF - Only members of the consortium make transactions and mining.