Blockchain – Everything You Need To Know About The New Database!
Nowadays, blockchain has been on the trend. We are receiving lots of news on blockchain, cryptocurrencies like Bitcoin, and the stock market. Many of us would have heard of it. But, how many of us have a clear idea on what these terms actually mean? We are here to understand these.
As the name suggests, blockchain is a chain of blocks that stores data digitally. In turn, these chains of blocks contain the stored data. So, basically it’s a solution for storing data securely and safely. It plays an important role in the fields where data security is crucial.
As and when new data comes in, it is entered into a fresh block. Once it gets filled, it is chained along with the previous block and the data are arranged in a chronological order.
Now, let’s arrive at a more technical meaning of blockchain.
In general, a ledger is a collection of information regarding account transactions. Same way a blockchain is an unchangeable distributable digital ledger recording transactions.
If that’s the case, you may wonder what’s the difference between a traditional database and a blockchain. A database has the data structured in the form of a table, while blockchain structures the data into chunks of blocks. Rather we can infer that a blockchain is a type of database, while a database need not be a blockchain. The data contained in a blockchain is immutable. However, the data stored in traditional databases can be exploited by third parties.
To keep it simple, let’s just understand it in the context of a group of friends. A group (chain) of friends (blocks) sharing an everlasting bond (secure & safe), cannot be separated (manipulated) easily. This is what blockchain is.
The analogy behind blockchain can be understood with a simple Google Docs or Canva team. When you share a google doc with a set of people, the doc is distributed to everyone. It is neither transferred nor copied. But, in a blockchain the set of people are anonymous or pseudonymous. All the modifications done to the document will be recorded in real-time. Hence, it inculcates transparency. There is no need for anyone to wait until someone makes a change and shares it with you.
This is the meaning behind saying “blockchain is decentralized” – it is distributed.
Hence, some of the key features of blockchain are as follows:
- Secure and safe
Blockchain in cryptocurrency:
Firstly, cryptocurrency is a digital version of money. There are various cryptocurrencies: namely Bitcoin, Litecoin, Ethereum, Dogecoin, Dash, Ripple and much more.
Cryptocurrency can be used to buy products and services. Anyhow, they are used only in a handful of countries and are banned altogether in other countries. In USA, El Salvador, Australia, Canada and Israel, certain small businesses and merchants accept Bitcoin. Whereas Egypt, Morocco, Iraq, Qatar, Algeria, Bangladesh, Tunisia and China have all banned cryptocurrency.
Bitcoin is the world’s first cryptocurrency and they are the ones who introduced blockchain technology in 2009.
A Bitcoin is a computer file stored in a digital-wallet app on any device such as a computer or a smartphone. People can send in and receive Bitcoins using the digital wallet.
Each of these transactions are recorded in the blockchain.
Hence, it allows us to track down the user transaction history .
How to get Bitcoins?
- You can buy Bitcoins using real money on popular cryptocurrency exchange websites like Coinbase and Gemini.
- They can also be created with the help of your computer. However, there’s much more to it.
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