THE HANS INDIA |
Nov 22,2017 , 10:44 PM IST
A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central recordkeeping.
Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically. Originally developed as the accounting method for the virtual currency Bitcoin, blockchains – which use what's known as distributed ledger technology (DLT) – are appearing in a variety of commercial applications today.
Currently, the technology is primarily used to verify transactions, within digital currencies though it is possible to digitize, code and insert practically any document into the blockchain. Doing so creates an indelible record that cannot be changed; furthermore, the record’s authenticity can be verified by the entire community using the blockchain instead of a single centralized authority, according to www.investopedia.com.
Blockchain technology is often described as the backbone for a transaction layer for the Internet, the foundation of the Internet of Value. In fact, the idea that cryptographic keys and shared ledgers can incentivize users to secure and formalize digital relationships has imaginations running wild.
Everyone from governments to IT firms to banks is seeking to build this transaction layer. Authentication and authorization, vital to digital transactions, are established as a result of the configuration of blockchain technology.
The idea can be applied to any need for a trustworthy system of record, writes Coindesk.com. Is it safe? The USP of blockchain is that it allows two parties to execute a transaction without any intermediary. Blockchain allows financial institutions to execute and verify transactions discretely without any human intervention.
The electronic ledger of transactions is continuously maintained and verified in 'blocks' of records. With the help of cryptography, the tamper-proof ledger is shared between parties on computer servers. Experts believe that blockchain architecture can significantly bring down the costs and reduce inefficiencies in the financial sector.
All major banks are experimenting with blockchain as they can use it for money transfers, record keeping and other back-end functions. Honduras government has put all land records on a public ledger - the blockchain. The minute there is a change in ownership, it gets recorded publicly, reports India Today.