Many of us are aware that blockchain is a hot topic at the moment. It’s a topic that’s becoming more important. And it can be your “elevator pitch” to impress an important client or your boss on the way to the executive floor in the elevator. But now imagine that the elevator unexpectedly stops between two floors and your conversation partner asks, “Great overview of the topic – but can you also explain how it really works?”
Blockchain technology is much more than just a backup network for cryptocurrencies. So, what are the key blockchain characteristics that make it so appealing? Why is it becoming so popular? To answer these questions, let’s delve a little deeper into the features of blockchain.
There are some exciting blockchain features, but “Immutability” is without a doubt one of the most important aspects of blockchain technology. But why is this technology so pure? Let us begin by connecting blockchain and immutability.
Immutability refers to the inability of something to be changed or altered. This is one of the most important blockchain features for ensuring that the technology remains as it is – a permanent, unalterable network. But how does it keep that up? Blockchain technology operates in a slightly different manner than traditional banking systems. It ensures blockchain features through a network of nodes rather than relying on centralized authorities.
The network is decentralized, which means there is no governing authority or single person in charge of the framework. The network is instead maintained by a group of nodes, making it decentralized.
This is one of the most important aspects of blockchain technology that works flawlessly. Allow me to simplify. Blockchain puts us users in an easy position. As the system doesn’t require any governing authority, we can directly access it from the web and store our assets there.
3. Enhanced Security
Because it eliminates the need for a centralized authority, no one can simply change any network characteristics to their advantage. Encryption adds another layer of security to the system. But how does it provide so much security in comparison to existing technologies? It’s extremely secure because it provides a unique disguise – cryptography.
Cryptography, when combined with decentralization, adds another layer of security for users. Cryptography is a complex mathematical algorithm that serves as a firewall against attacks. Every piece of information on the blockchain is cryptographically hashed. To put it simply, the information on the network conceals the true nature of the data. Any input data for this process is run through a mathematical algorithm that generates a different type of value, but the length is always fixed.
4. Distributed Ledgers
Typically, a public ledger will contain all relevant information about a transaction and its participants. There’s nowhere to hide because it’s all out in the open. The case for private or federated blockchain is slightly different. However, in those cases, many people can see what is going on in the ledger.
This is because the network ledger is maintained by all other users on the system. This distributed computational power across the computers in order to achieve a better result. This is why it is regarded as one of the blockchain’s essential features. The end result is always a more efficient ledger system that can compete with traditional ones.
Because of the consensus algorithms, every blockchain thrives. The architecture is cleverly designed, and consensus algorithms are at its heart. Every blockchain has a consensus mechanism to aid the network in making decisions.
Simply put, the consensus is a decision-making process for the group of network nodes. Here, the nodes can reach an agreement relatively quickly. Consider it like a voting system in which the majority wins and the minority must support it.
Consider a computer that is accessible and shared by all (“single source of truth”). This computer stores events, ownership, and activities, as well as workflows involving multiple parties, without the use of separate systems and databases processed – no need for counter-checks.
Blockchain will change the way digital services are delivered globally across all industries. Blockchain is altering the game. Prepare for the upheaval.