Do you know!
- Technology giants such as Intel, Cisco Systems, Microsoft, and Dell have invested in learning about Blockchain.
- The world’s largest banks and financial institutions have already created their cryptocurrency using Blockchain technology.
- Fin-Tech companies realized that smart deals are changing the way of doing business using the Blockchain platform.
- There are thousands of fresh start-ups investing every day into the blockchain, adapting to the technology of the future!
All these figures claim that Blockchain is the future. Hence, reading this blog becomes imperative.
After reading the above note, you might be thinking: why is it happening? Why is every big company choosing the Blockchain? What’s Blockchain? Why is it called Blockchain, and what are the advantages of Blockchain? This blog post aims at providing all these nail-biting answers to help you in choosing the best for your company. So, stay with us until the end. Let’s start with,
It’s like a database; it’s a way of storing records of value and transaction. Or, Blockchain can be used to record and transfer anything of value, not just financial transactions. Blockchain-based technology is being used in many applications across different industries, including digital identities, social networks, voting, cloud storage, and other decentralized applications, etc.
Why is it Called Blockchain?
Let’s take an example of a library to understand Blockchain practically. Suppose you go to a library to borrow a book, but someone has already borrowed that and took it home. Over there, the library is not allowed to share the details of the person who borrowed that book. Now, you can’t borrow it from him because you don’t have any details. In this case, the library maintains the central database of all that information like address, name, etc. by one person. Only he has access to records. Thus, until he enters data, you can’t borrow any book from the library.
Now, unlike the central database, imagine a decentralized database where there is no such headache of maintaining centralized data by one person. And each participant has access to the records to update information. In such cases, you can directly borrow the book from other participants without bringing it to the library and update data accordingly. That makes it less time-consuming and more efficient. What do you say?
Now back to Blockchain. In Blockchain, whenever we do transactions like borrowing or lending books through a decentralized database, it will create a new block of information. And this block will be added on top of the previous blocks by referring to the block before it, linking them together.
- Block 5 links to block 4
- Block 4 links to block 3
- Block 3 links to block 2 etc.
By linking these blocks together, it creates a chain of blocks, hence the name Blockchain. There is no kind of central database or authority; if a person wants to claim they are the original owner of the book, it can be traced from the latest block of the transaction to the very first block.
Blocks added to the blockchains can’t be tampered with or changed, they are permanently added to Blockchain.
Advantages of Blockchain?
Keeping up with the daily news will make you aware of the hype about Blockchain. And why more and more companies are not balking at Blockchain technology. Behind this, there are simple reasons that everyone should know!
1) Secure and transparent:
The Blockchain is revolutionary because it has re-invented the financial institution. The first-ever blockchain that existed in 2008 means 12 years from now. And in these 12 years, it became a globally distributed database that is entirely decentralized. In other words, it has no boss or some whom we could blame or award. It’s running on all computers unstoppably with un-replaceable blocks.
Thus, it’s a chain system that represents the single source of truth. All un-replaceable details on the computers that are running Blockchain. That’s why it provides full transparency in all administration. There is no human intervention in the process when new blocks are created every 10 minutes; it exhibits an efficiency that no person has ever achieved. Also, it allows full accessibility to all human beings.
2) Terminate the third-party services:
It’s interesting to know a single banking system can save between 8-15 Billion dollars per day using blockchain: terminating trusted third-party services, replacing them with mathematical algorithms, and digital signatures.
3) Faster and cheaper:
The platform is faster and cheaper in a way that supports employee payments not daily but every second. By removing third-party actors involved in the process of recording and transferring assets, it’s able to reduce cost. That also helps in settling transactions on a shared distributed ledger, which can perform transactions instantly.
4) 100% availability:
Using a wholly decentralized peer-to-peer network, data will always be available. As already mentioned, Blockchain can record anything of value; namely, a record of ownership, copyright license, a digital identity, digital files, anything that could be recorded in a database.
Blockchain is revolutionizing a wide variety of businesses. Blockchain technology is influencing the prospect of doing business. That’s why instead of falling behind, almost every big company is taking advantage and learning Blockchain.
If you have been familiar with Blockchain, you must be looming around a new term called Bitcoin. Isn’t it? So, what is Bitcoin? I would apprise you of the difference between Blockchain and Bitcoin by their definitions. Bitcoin is a cryptocurrency (digitized money) that remains in action due to the technology called Blockchain. The first application tested on the blockchain platform was a cryptocurrency called Bitcoin. Hence, you might say Bitcoin is a part of Blockchain, or rather the most popular cryptocurrency.
The advantages of Bitcoin are implicit as it is the first member of blockchain technology. It deals with every aspect as Blockchain does. For instance, Fast and cheap; security and transparency; terminate third-party; 100% availability, etc.
Here is another very popular blockchain technology that is second after Bitcoin in the market. And, the chances of its growth are evident: that is Ethereum.
What is Ethereum?
Ethereum is the next step in the future of blockchain technology. Its development has the same footing as the Bitcoin blockchain. However, people au fait with the blockchain believes “it takes the possibility of blockchain technology to another level.”
Ethereum is a blockchain with a programming language that allows applications and smart contacts to run on top of the underlying blockchain. In this way, developers can create programs that run on a blockchain and use the computing power of thousands of computers connected to the blockchain network.
Almost every application that is running on a computer can work on the blockchain as well. By making Ethereum work, developers can quickly create applications with ease without the need to create their blockchain and cryptocurrency.
The Ethereum network uses the cryptocurrency ‘Ether’ that acts as currency on the network. Further, it can be exchanged as payment for running decentralized apps on the network.
The ‘Ether’ is the largest cryptocurrency by market cap after Bitcoin with a market cap of over 10 billion dollars.
Ethereum VS Bitcoin
The primary difference between Bitcoin and Ethereum is that Bitcoin is mainly used as a distributed ledger for financial transactions, but Ethereum is designed to be used as a distributed computing platform for running applications.
Bitcoin can be used to pay for goods and services anywhere they are accepted, the currency of the Ethereum network “Ether” is designed to be used by developers to pay for computing power on the network when running decentralized applications.
Bitcoin and Ethereum both have digital currencies but from an overall point of view, they differ in purpose. The point of Ethereum was not to establish itself as a payment alternative but to encourage developers to create and run applications within Ethereum.
To put it simply: Bitcoin is mainly a currency for financial transactions. Ethereum has multiple facets. While it does have its cryptocurrency, that is not all it has. The currency is one part of the network as Ethereum also has an entire computing platform on top of the blockchain.
Benefits of Ethereum
As the Ethereum blockchain network is run by thousands of computers around the world, the application can be run using the computing power of a massive global network of computers.
The problem with the Bitcoin network is that it’s more powerful than the top supercomputers in the world combined and yet the processing power is wasted generating random numbers to add blocks to the blockchain.
Ethereum puts all the computers connected to the network and their processing power to better use allowing developers to create applications that run using the combined processing power of the network along with blockchain technology.
Developers do not need to create their blockchain and get computers to connect to it. Ethereum has an already established network of computers on the Ethereum blockchain.
The Ethereum platform also has the Ethereum virtual machine and solidity programming language. Solidity can be used to create decentralized applications or smart contracts that are then compiled by the Ethereum Virtual Machine and run on the blockchain.
We hope this blog post will help you a lot in knowing Blockchain. If you have any queries or any further doubts please let us know!