BLOCKCHAIN: WHAT IS IT?

Nearly all cryptocurrencies are built on the cutting-edge database technology known as blockchain. Blockchain makes system hacking and fraud extremely difficult by dispersing exact replicas of a database throughout an entire network. Although cryptocurrency is now the most prominent application for blockchain, the technology has the potential to be used for a very broad range of purposes.

DESCRIBING BLOCKCHAIN

Blockchain is fundamentally a distributed digital ledger that records all kinds of data. The ownership of Non Fungible Tokens and cryptocurrency transactions can both be recorded on a blockchain (NFTs).

Although this type of data can be stored in any traditional database, blockchain is distinct in that it is decentralized. Consider an Excel spreadsheet or a bank database. Instead of being managed in one place by a single administrator, a blockchain database is held on numerous identical copies on various computers dispersed throughout a network. These particular computers are known as nodes.

METHODOLOGY OF BLOCKCHAIN

Blockchain refers to the digital ledger as a "chain" made up of distinct "blocks" of data. A new "block" is made and attached to the "chain" each time new data is added to the network on a regular basis. 

Why blockchain is thought to be very safe has a lot to do with how these new blocks are made. Before a new block is added to the ledger, the authenticity of the new data must be verified and confirmed by a majority of nodes. In the case of a cryptocurrency, these can entail making sure that newly added transactions in a block are genuine or that coins haven't been used more than once.

To maintain consistency, all nodes must update their copies of the blockchain ledger. The majority of the time, cryptography is used to safeguard transactions, necessitating difficult mathematical equations be solved by the nodes in order for them to be processed.

Blockchains can be either private or public. In a public blockchain, anybody can take part, which entitles them to read, write, or audit the data on the blockchain. Since nodes are controlled by a single entity, it is noteworthy that it is very difficult to change transactions that have been recorded on a public blockchain.

An organization or group is in charge of a private blockchain, though. It has the power to go back and change the blockchain, and it is the only entity that can choose who gets admitted to the system. Because information is distributed across numerous nodes for further security, this private blockchain process is more like an internal data storage system.

THE USE OF BLOCKCHAIN

From managing voting systems to delivering financial services, blockchain technology is employed for a variety of tasks.

1. CRYPTOCURRENCY:  The foundation of cryptocurrencies like Bitcoin or Ethereum is now the most widespread application of blockchain technology. On a blockchain, transactions involving Australians buying, exchanging, or using cryptocurrencies are tracked. Blockchain may become more popular as a result of the increased use of cryptocurrencies.

   Currently, hardly many people buy products and services with cryptocurrencies because of how unstable they are. But this is altering as PayPal, Square, and other money service providers make digital asset services widely available to retailers and wholesale clients.

2. PROPERTY TRANSFERS: The ownership of various assets can be tracked via blockchain, as well as transferred. Digital assets like NFTs, which serve as a representation of the ownership of digital artwork and media, are currently prominent examples of this. :The ownership of physical things, such as the deeds to real estate and vehicles, might nevertheless be handled using blockchain technology. The blockchain would be used by both parties to first confirm who actually owns the property and who has the funds to purchase it. As soon as it was done, the sale could be finalized and recorded on the blockchain.

   
   

3. BANKING: Blockchain is being utilized to conduct transactions in fiat currency, such as pounds, Australian dollars, and euros, in addition to cryptocurrencies. Due to speedier transaction verification and processing outside of regular business hours, this may be quicker than sending money through a bank or other financial institution.

   
   

4. MONITORING THE SUPPLY CHAIN: Large volumes of information are involved in supply chains, particularly as items are transported across international borders. It can be challenging to identify the root cause of issues, such as which vendor sold the low-quality goods, when using conventional data storage techniques. As with IBM's Food Trust, which employs blockchain technology to track food from its cultivation to its consumption, storing this information on blockchain would make it simpler to review and monitor the supply chain.

   
   

5. VOTING: Additionally, experts are investigating how to use blockchain to stop voting fraud. Theoretically, blockchain voting would make it unnecessary for individuals to physically gather and validate paper ballots by allowing voters to submit votes that couldn't be tampered with.

   
   

6. 'SMART CONTRACTS': The self-executing contracts, sometimes known as "smart contracts," are another blockchain invention. Once certain requirements are met, these digital contracts take effect automatically. For instance, after the buyer and seller have satisfied all requirements for a trade, a payment for the item may be immediately released.

   
   

ADVANTAGES OF BLOCKCHAIN

1. Increased Transaction Accuracy
2. Added Security
3. Less Time-consuming Transfers
4. No need for middlemen

DISADVANTAGES OF BLOCKCHAIN

1. Energy Costs Are High
2. Possibility of Criminal Activity
3. Asset Loss Threat
4. Number of Transactions Per Second Limit

STEPS FOR INVESTING IN BLOCKCHAIN

• The simplest method is to buy blockchain-based cryptocurrencies like Bitcoin, Ethereum, and other tokens.
• Invest in an exchange-traded fund that focuses on blockchain-related businesses and assets.