How Blockchain Has Changed The World
It was only when cryptocurrencies exploded that people noticed their core technology, blockchain. In fact, blockchain has great potential to change the future of many daily-life applications. In this article, Tokenize Xchange will show you how Blockchain technology has changed the world with its applications. Let’s find out!
What is blockchain?
Blockchain is a decentralized database among a computer network, in which a computer has functioned as a node. This system can record information in a way that the database is invulnerable, which means no one can change or hack the records. In fact, blockchain has been used to be the core technology of cryptocurrencies, as Bitcoin, to secure and record transactions in a decentralized system.
A blockchain consists of various blocks, each block contains a number of transactions. Every time a transaction is processed on a blockchain, a record will be recorded on a digital note called a ledger after a suitable authentication and verification. Information is recorded using a hash, which is a unique cryptographic signature.
This mechanism allows a blockchain to organize data into stringing blocks, instead of tables like a normal database. This data structure creates an irreversible data chronology. When a block is created and validated, it becomes a part of the chronology with a precise timestamp.
How does it work?
A blockchain has 3 main elements including blocks, miners, and nodes.
Blockchain is a sequence of dark consecutive blocks, each block has 3 important parts:
- The transaction data is built-in in each block.
- A nonce contains a 32-bit number. When a block is constructed, a mechanism creates a nonce at random, which then generates a block header hash.
- A 256-bit number, which is called a hash, links to a nonce. This hash is used for transaction processes.
A cryptographic hash is created by a nonce when the first block of a chain is built. The data in the block is considered to be signed and invariably linked to the nonce and hash, except it is mined.
Blockchain technology remains the concept of decentralization. The chain cannot be owned by a single computer or entity. Moreover, the nodes link together to form a distributed ledger. Any type of electronic equipment that joins the network and saves copies of the blockchain is known as a node.
Every node has its own copy of the blockchain, and in order for the chain to be updated, trusted, and confirmed, the network must algorithmically approve any newly mined block. In addition, blockchain is transparent, so that every action can be observed and examined. Participant transactions are tracked by a signed identification number.
When a transaction occurs, a network of thousands of nodes across the globe competes to confirm that transaction. This may be known as mining, and the individual that joins the process is called a miner. The miner that first completes a new block is rewarded with a number of coins for their efforts. These fees are made up of newly-created coin and network fees, which are passed on to the buyer and seller. Depending on the volume of transactions, the costs may increase or decrease.
To gain an advantage when mining, miners must equip themselves with many devices with the right configuration and software. These devices will solve the extremely complex algorithms of finding a nonce that its hash will be accepted. Because a nonce is a 32-bit number, but a hash is 256 bit. So there will be four billion possible nonce-hash combinations to be checked to find the acceptable one.
How blockchain has changed the world?
Blockchain technology can be applied to many aspects of daily life.
Blockchain was the foundation for the beginning of the cryptocurrency era, which is some kind of digital currency with the ability to pay for goods and services just like normal cash, from a meal to a bus ticket. But unlike cash, crypto utilizes blockchain to operate as a public ledger as well as an advanced cryptographic security mechanism, ensuring that all online transactions are recorded and protected.
On the other hand, DeFi or Decentralized finance has several advantages that can overcome the disadvantages of a centralized system:
- Some individuals are on the blacklist of setting up accounts or using financial services.
- Lack of access to financial services.
- Financial services can block your payments.
- Risk of loss of personal information.
- Governments or centralized organizations can close services if they wish.
- Transactions are usually made within specific hours.
- Money transfers can take a long time due to manual processing.
Healthcare system improvement
Health is one of the basic human needs, especially in developed countries. Patient medical records are difficult to store and manage fully with today’s software systems because a patient can participate in treatment for a long time, with many different diseases and doctors.
Blockchain can be a reasonable solution to solve this problem. The medical records will be stored in a decentralized manner on the ledger and can be looked up to by the patient or authority. Based on that information, patients can be diagnosed and treated more effectively.
Supply chains in the world are always very fast and continuous. Hence, it is possible that some organizations or individuals can take advantage of it to sell counterfeit products. If not taking notice, you may end up buying these products and paying for a disproportionate quality.
In fact, blockchain is a great way to help consumers to ensure the provenance of the product they intend to buy. Since the information recorded on the blockchain is immutable, companies can track the status of their goods, as well as remove counterfeit products from the supply chain. And as a result, the market is left with only genuine products.
And there would be other applications that have been developed.
Though many experts believe that blockchain cannot change many aspects in a rapidly developing society, we cannot deny all the contributions of blockchain technology. Let’s see what blockchain can do in the near future and don’t forget to follow Tokenize Blog for more technology updates and promotions from us.
Cryptocurrencies are subjected to high market risk and volatility despite high growth potential. Users are strongly advised to do their research and invest at their own risk.