The concept of Blockchain was first unveiled as the foundational mathematical framework using which some intractable problems such as ‘double count’ and ‘economical crypto framework’ were solved. Today blockchain has found applications and acceptance in a much larger context in a wide spectrum of industries. For example – Blockchain is used in the world of finance as a distributed ledger which stores financial transactions including but not limited to cross-border currency transactions and money remittance, storing smart contracts for real estate or any other financial asset sale purchase, storing smart insurance contracts and public blockchains are used to store custom crypto currencies which are mathematical and philosophical descendants of Bitcoin. Blockchain was first coined by Santoshi Nakamoto in 2008.
Blockchain in future will be used as a standard database. A blockchain database ideally contains two types of records – transactions and blocks. Each block in the formed chain consists of a time stamp which links the preceding block. Blocks also hold valid transactions encoded. The blockchain technology is also globally decentralised in a fashion wherein previously registered transactions cannot be altered. Since it is not centralised at any single point but stores data across the network, it eliminates the chances of any failure, vulnerability and exploitation of data. On the other hand, it bolsters transparency with respect to maintenance of public ledgers by the government.
Blockchain uses the security method of public key cryptography which is randomly generated the string of numbers. Bitcoins sent across the network are recorded in those strings of numbers that basically represents each of their address. The owner access lies in the form of a private key which is more like the password. The owner uses the same password to interact with the blockchain database which is incorruptible in all ways.
The Blockchain technology is also a shared ledger which can act as a source of truth for the business doing transactions and recording those transactions across the network. Each participant who has been shared the ledger has their own copy. The rights can be permission differently for different participants so that they only see appropriate or required transactions. Frequently, companies have multiple ledgers for multiple business networks to which they contribute. The Blockchain technology can also be used for recording and totalling financial transactions.
Smart Contracts which include digital assets and which can be converted to value are also embedded in blockchain and executed in the transactions. A smart contract which is a digital representation of business rules, tangible and intangible assets in a verified, signed and encoded programming language. Blockchain has the ability to protect records with digital signatures, unique IDs for customers, invoice and reference numbers. It is encrypted and generates private and public key to sealing records. The transactions recorded are required to be authenticated while the cryptography remains a centralised driven process.