Everything is computerized today. Many small companies have computer systems of their own. Blockchain, bitcoin is also a new form of these technologies, and they have the brightest future among all the latest technologies. In this article will talk about blockchain as well as its elements.
What is Blockchain? How does it work?
Blockchain, in simple words, is a collection of blocks—each containing our data and is connected in chronological order. Many people believe that blockchain is similar to bitcoin, but the reality is blockchain is the underlying technology that enables bitcoin. Another way to describe blockchain is to suppose blockchain is the engine of the car and that car is of bitcoin. Every block in the blockchain contains information it could be about anything, like your transactions, personal data, and the entire system is spread across the computer system, making it decentralized. This decentralized nature makes it difficult to get hacked. Though the data is synchronized and the critical element that makes blockchain keep working is trust.
Now let’s have a closer look at the blockchain. Every block in a blockchain has three sides:
- The hash of the previous block
Different kind of data can be stored on the blockchain. For instance, the data stored on the bitcoin blockchain would be about the transaction details (Amount, sender and receiver). Next comes the hash. Hash is similar to our fingerprints. Just like our fingerprints, it is also unique. It identifies the block and all of its components. Once, a block is made, its hash is also created. Making changes in the neighbourhood also change its mixture. After all, causing changes in the region, it no longer remains the same block. On the other hand, hashes are useful to determine changes made in the community. The final side of the block is the hash of the previous block. Hash of the earlier blocks makes the chain making it secure. Let me explain this through an example. Suppose we have three blocks. Each of the blocks contains the hash and the hash of the previous blocks. Hash of the first block is the other hash of the second block. The first block does not have any prior mixture as it is the first one. Usually, this block is known as the genesis block.
Now let’s say you make some changes in the second block. As well as the hash of the neighbourhood also changes. That will make the third and all other communities inoperative because they don’t contain the previous logical mixture.
But current computers are much more durable and faster. You can easily tamper any block and can easily calculate hashes of the block to make your chain valid again.
The best example of the blockchain is bitcoin. In which transaction is made peer to peer without involving the third party like a bank, or it could be a person too. Blockchain is the best way to keep tracks.
History of Blockchain:
So far, we have come to know what blockchain is and basically how does it work. But the main question is still unanswered. Who invented blockchain? How does blockchain get into consideration? Blockchain has come along a long journey since 1991. In 1991 for the very first time the concept of chain of blocks was given by Stuart Haber and W Scott Stornetta. Then in 1998, a scientist named, Nick Szabo promoted his time on working digital currency bit gold. In 2000 Stefan Konst published the concept of cryptocurrency and its implementation. In 2008 Satoshi Nakamoto released a paper presenting a blockchain model. Ultimately in 2009, Nakamoto implements the first blockchain for making transactions by bitcoin. Blockchain is getting evolved with time. Now Ethereum, Ripples are the second generation of the bitcoin.
Uses Of Blockchain Technology:
Let’s have a closer look at the practical examples of blockchain. This will help you to understand blockchain better. Here is a brief overview of blockchain and the technologies in which it is used.
- The very first and widespread use of blockchain is in the form of bitcoin, in which there is a peer to peer transaction. No third person is involved in the process.
- How many of you have ever heard of odometer fraud? By odometer fraud, someone can make a car appear to be newer and less worn than the actual. As a result, the customer would be paying more than the real worth of the vehicle. Government has tried it’s best to overcome this problem, but it’s not enough. To solve this problem, we can use blockchain by writing the car’s mileage into the blockchain. No one would tamper with the data, and everyone can have a safe look at the car’s history. In Germany and Switzerland, more than 100 vehicles are going through this experiment.
- You can also use blockchain in intellectual property, patents, notary. A notary is a person who verifies signatures on a legal document. Several websites like stamped enable you to add records in the bitcoin. Once added, at a certain point, you can always prove that you have created this document.
- Another way to use blockchain technology is digital voting. Right now, voting is done either through paper or individual computers. Both of them have their perspective issues. Here again, blockchain can be used to sort out all the matters. Having a transparent nature, everyone could verify their vote, and it would make tampering difficult.
- Let’s move to another example; my most favourite one the food industry. Blockchain can be used to track down your food products from the moment they are made until they have reached their customers.
- We can also store our medical data which can only be viewed by specific doctors with the help of a digital signature. Thus securing the confidential report of the patient.
Blockchain For HealthCare:
Despite all the uses of blockchain, the significant advantage of blockchain is in the sector of healthcare. Health is such a precious treasure; you would spend all of your money to have a healthy life. You can easily share and handle data, audit trail of medical activities, medical billing and record. Confidential information of a patient can also be secured through blockchain. Storing the medical history of your patient is very important and is a sensitive matter. It is essential to save all this kind of data from cybercrimes. In case if the patient is being moved from one hospital to another, it’s data can easily be transferred without getting tampered. Hence, blockchain can be beneficial for healthcare centres to keep their data secured and reliable.
Can Blockchain Be Hacked?
Since the blockchain system is secured and safe still they are little lags in the system which makes easy for hackers to hack the system. In the past few couples of years, the ratio of hacking blockchain has relatively increased. No system in the world is perfect. Here are a few reasons why blockchain can be hacked.
- Sometimes there might be an error from your side while making a blockchain. When this happens, hackers look for a way to get in and hack the system. In case of a transaction, if your account(amount) is cut, it cannot be undone.
- Weaker security. This happens when you are trading your money like cryptocurrency. In the case of weaker security precautions, hackers will easily find a way to hack your account. Make sure all the necessary precautions while you are trading your money.
- Next one is the “51% attack”. As the name suggests, anyone who is handling more than 50% power within a network, it is more likely that he will create some fraudulent yet validate transactions. In such cases where the attacker has more than 50% power, it means it has the most transactional history. In that case, all of his transactions, including the incorrect blocks, would be treated as correct ones.
- Next comes error in the code. In smart contracts, laws are made. For example, if that happens, XYZ person would be paid. Bugs can exist in the system, whether intentionally or unintentionally. In both scenarios, you might lose your money.
- Blockchain is all about trust. If there is any lag in the system, it will cause a loss, and the trust would be broken; as a result, the whole system would be stopped. It takes a year to build trust while it takes a second to break it. Anyone handling in blockchain must take necessary steps to avoid such bugs.
Blockchain has come a long way since 1991. A system in which there are multiple blocks, each block contains our information and are connected in chronological order. And these blocks are placed at different systems making it decentralized. This decentralized nature of blockchain makes it difficult to get tampered. Still, there are chances that your blockchain might get hacked. One must take all the necessary steps while handling blockchains. Blockchains have a great future; they are used almost in all business and technologies, particularly in the healthcare sector.