Blockchain: Transparent Management of Transactions

Hello Trailblazers !

Those who have read about Bitcoin transactions, must have heard and read the word blockchain many times. Blockchain eliminates the need for third parties such as banks to mediate transactions. In this blog post, we will see how blockchain helps to have trusted, verified and secured transactions.

How Bitcoin and Blockchain Differ

• Blockchain and bitcoin are completely separate things. Blockchain is a sea in which Bitcoin is like a small fish. This sea is slowly expanding in the coming years to store technology around the world. 

• Simply put, blockchain is a virtual ledger, in which all your transactions will be recorded digitally and will be extremely secure and confidential. In particular, this entry will not be located in any one place and will be widely distributed worldwide. 

• There will be two keys like public key and private key. Without both of these keys, no one would be able to change that information.

The complicated process

To establish trust and transparency,  blockchain uses:

• Hashing
• Digital signatures
• Consensus

Hashing

• In fact, this is a very complicated technical process. Blockchain is a chain of numerous blocks. Each block that has a specific data storage capacity will record thousands of transactions. The two blocks are linked by hash. This hash is a code of complex mathematics. If one wants to hack information, this hash has to be solved with complex mathematics or code, which is a very difficult task.

• Not only that, but to reach a particular transaction within a particular block, it would have to be decoded with numerous hashes, which is almost impossible. Therefore, the transaction is claimed to be completely secure. 

Digital signatures

• In each of these blocks, the user's transactions are stored digitally, making it possible for all to see. The digital signature will have secured these transactions. It would be almost impossible for anyone else to digitally sign or manipulate this information.

Consensus

• Consensus is a series of checks to verify the data. In other words, there’s a specific proof of accuracy that all participants agree to.

Record of each transaction

• Any old transaction will be recorded in it but every new transaction will also be registered. That is, all information can be available in one place. 

• For example :  If you have purchased a product, all the information about the company from which it was purchased, the raw material used for that product, its quality, various certificates related to it, technical information about the related product, distributor to distribute to the customer, the retailer's financial information, customer information everything will register on it.

• Suppose a farmer sends grapes to Europe, if they reach the person to eat it then from whose farm they come from, what pesticides they have used, what is the content of it? what is the content of the grapes, the quality of the grapes, the agent who sent the goods from the farmer, the ship of which company went to the respective country, what merchant took it in that country, the record of all its transactions, financial information, etc. will be known to all concerned customers, besides the number of people in that chain. This information will be available to everyone. 

• In particular, if anyone tries to manipulate it, then all the people in the chain will understand it immediately.

Unlimited utility

• The utility of the blockchain will be limitless. Blockchain will eliminate the need for intermediaries. 

• There will be no need for banks with real financial transactions. Everyone can safely perform all transactions at their own level. Digital currency will be used in the future.

• Blockchain technology can be used unlimitedly in not only banks but also in agriculture, education, media, industry, infrastructure and all sectors. 

• Significantly, it also suggests the possibility of black money being banned. For anyone who has intellectual property, this technology will be a boon.

References

• Blockchain Basics