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What is a blockchain? – The technology simply explained

 


What is the blockchain?

The term blockchain comes from English and means "block chain". Each block represents a digital data record that is saved one after the other. This creates a long chain of data records.


In principle, the blockchain is an extremely large database that Which begins with an original block and then has several more blocks appended to it. The block chain forms a series of data sets that build on one another. 


How does the technology work?

Blockchain is a distributed database. Everyone who participates in the system saves a copy of the chain on their computer themselves. This secures the row of blocks and increases security against manipulation.


The order of the blockchain is secured by a so-called checksum. This ensures that the number of blocks cannot be changed later. Even if a wrong block is added, this wrong block can be discarded afterwards. 

What are the applications of the blockchain?

By far the best-known application of blockchain technology is Bitcoin. This is a decentralized currency with its own booking system. With this decentralized booking system, an agreement is reached between two parties without a third intermediary entity. Bitcoin is the best-known example of cryptocurrencies, all of which work on a similar principle.


Another important application of the blockchain is the smart contracts . These are secure contracts that only need 2 parties to work legally . Under certain conditions, these smart contracts can take effect automatically. Many cryptocurrencies also have smart contract functions.



What are the advantages of the blockchain? 

Blockchain offers a number of advantages that have made the technology so popular in recent years:


Security : Once a "blockchain" is attached and verified, it cannot be modified, protecting against tampering. Furthermore, the blockchain is extremely secure due to the constantly created copies on each device.

Transparency : The blockchain can be tracked and checked at any time.

Cost -effectiveness : The technology does not require a third party control. This massively reduces the cost of control.

Time saving : The technology presupposes digital accounting. This reduces the communication effort and minimizes the potential for errors through automation.

What does the future of technology look like?

The blockchain forms a stark contrast to typical central forms of storage. The technology is decentralized, which corresponds to the wishes of many users. More and more people want a digital world in which no large central authorities such as large corporations or governments call the shots. The blockchain should offer this world.


Web 3.0

Furthermore, the technology offers a wide range of application areas. In the beginning, it was just cryptocurrencies like Bitcoin that were supposed to establish a decentralized currency. There is now a vision of creating a completely decentralized digital world. Web 3.0 could soon become reality and will be based on blockchain in the future .

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