What is Blockchain Technology & Why Is it Needed?

Blockchain is the world’s leading technology to reshape the future. It is a decentralized, digitized and encrypted system that creates a permanent record of transactions between two parties. The backbone of cryptocurrencies like Ethereum (ETH), Bitcoin (BTC), and Litecoin (LTC) is also blockchain technology.

An Introduction to Blockchain

Blockchain is a distributed ledger that allows an open, public database to be stored and managed. It’s decentralized, meaning that there’s no central authority controlling it. Instead, the information is spread across thousands of computers around the world.

Blockchain is often described as a public ledger because all transaction data is available to anyone looking at it. This leads some people to think of Blockchain as ensuring transparency in business transactions or government processes like elections.

As mentioned above, Blockchain uses consensus mechanisms, systems where all parties agree on what data means and then use their computer’s processing power as “votes” toward an agreed-upon outcome. In cryptocurrency blockchains such as bitcoin’s or Ethereum’s, these mechanisms work by having nodes compete with one another over whose version of history will become canonical; this makes them both decentralized (no single party can control what happens) and transparent (you can see how things happened).

Blockchain: A Data Structure That Makes Bitcoin Possible

An individual block of data is called a block. A blockchain is simply a series of blocks that are linked together in the form of a chain.

Each block has four things:

• Transaction Data (Information on what happened)
• Time Stamp (When did it happen)
• Hash Link (That connects it to the previous block)
• Nonce (Number used once only — most important)

Why is Blockchain Important?

Blockchain technology is an innovative way to record transactions and share information in a very secure manner. The technology allows people to interact with one another without a centralized database; the records are stored on the computers of everyone participating in the network. This makes it more difficult for hackers or other bad actors to tamper with data since they would have to hack into multiple systems simultaneously.

Blockchain also has several other benefits that researchers have explored:

• It can be used as an identity management system where users can control access to their personal information while still maintaining privacy and security
• It’s excellent for tracking assets like cars or real estate deeds because it reduces paperwork costs

What is the relationship between Blockchain and cryptocurrency?

The relationship between Blockchain and cryptocurrency is relatively straightforward. Blockchain technology is what makes cryptocurrencies possible. You could say that cryptocurrency is a digital currency built on the Blockchain or decentralized ledger system. The most well-known example of a cryptocurrency is probably Bitcoin. An anonymous person first released it in 2009. They went by the name Satoshi Nakamoto.

Some people today think that Blockchain will change our society. On the other hand, some believe that it’s a fad. But no matter which side you fall on regarding the future of blockchains, it’s likely that they will become increasingly important in the coming years as they grow in popularity and usage across multiple industries (both online and offline).

What are the uses of Blockchain Technology?

Blockchain technology can create a digital identity, store data securely, and create a digital currency. In addition, a ledger or a digital contract can also be made using blockchain technology.

Blockchain technology is used for more than just cryptocurrencies. It has many other uses, such as:

• Tracking products from point A to point B (a blockchain-based supply chain)
• Verifying that something came from its source (certification via the Blockchain)

How will the Blockchain be used in the future?

As you can see, blockchain technology has endless possibilities in the future. Blockchain offers a way to safely store data and track transactions without relying on a centralized authority like a bank or government. It also provides an excellent way to verify identities as well, which is particularly important when it comes to passports.

In some ways, it’s similar to how the internet works. Many people are connected by computers that share information simultaneously (or nearly). The difference is that instead of using servers run by companies like Google or Facebook, everyone shares all the data through their own devices. That makes it more secure since there aren’t any central points for hackers who want access.

Final Thoughts

The original purpose behind Blockchain was to record transactions between two parties efficiently without needing a third party (like a bank) involved in any way; however, since then, many other applications have come about, including digital identity management systems or voting systems!

I hope this article was knowledgeable and gave you some idea of the basics of blockchain technology and its applications. These are still early days of what could become an essential technological revolution, but several exciting applications are already being developed. Blockchain has tremendous potential to reshape how we manage data and conduct financial transactions. Still, it also presents challenges that need to be addressed by lawmakers and regulators before its full potential can be realized.

Originally published on Medium: https://medium.com/illumination/what-is-blockchain-technology-why-is-it-needed-94449bc28bee