A Blockchain is a type of distributed database used to store data electronically on a computer system. Blockchain networks are often accessible to the public, although once a piece of information is recorded in a public blockchain, nobody can alter it.
Blockchain networks keep data in the form of blocks that are chained together. When information is added to a blockchain, new blocks are formulated. Over the last decade, blockchain has been used in finance, banks, and cryptography as a ledger for transactions.
Types of Blockchain
Bitcoin has established the primary purpose of blockchain and stores information on each Bitcoin transaction made. Unlike primary databases, blockchain stores data in groups of computers kept in separate locations.
Over the years, Bitcoin runs on the blockchain and has since imitated thousands of imitators. Like other technologies, blockchain has proven beneficial. It benefits progressive companies with growth opportunities. Bitcoin established the start of a cryptocurrency era that has run for years. Experts expect it to cross over to the future of finance.
Other types of blockchains include:
- Public Blockchains that are completely decentralized and allow anyone to join. They are primarily used to mine cryptocurrencies like Bitcoin, ethereum and Litecoin.
- Private Blockchains are permissioned and controlled by a central entity. Ripple is an example of a managed blockchain.
- Consortium Blockchains are permissioned and controlled by a group of organizations instead of one entity.
- Hybrid blockchains are blockchains controlled by a single organization but with a public blockchain oversight.
Understanding Blockchain and How it Works
A blockchain is made operation through blocks. Information stored on blocks depends on the type of blockchain in question. A Bitcoin block consists of sender, receiver and transaction details about a bitcoin transaction. Every first block to be mined is called a Genesis Block.
Every block has a unique signature called a hash. It’s a sort of fingerprint that identifies a block’s content. A slight change in the block causes a hash to change. Blockchain applications cut across the following use cases:
- Sharing Medical Data
- Cryptocurrencies and NFT marketplaces
- Cross-border financial payments
- Voting mechanisms
- Real estate industries
- Anti-money laundering tracking systems
- Monitoring supply chains and logistics
Can Blockchain be Hacked
Unlike digital exchange hacks, decentralized blockchain hacks are rare. Most blockchains in the crypto industry are public, peer-to-peer and open source. That fosters transparency and investors’ trust.
Blockchains are decentralized and distributed across several computer nodes. And that eliminates failure and hacks because the central core cannot be traced for hacks. Blockchain’s architecture ensures that 51% of blocks have to be hacked to authenticate a system breach.
The longevity of a blockchain and its use case makes a 51% hack improbable. Blockchain hacks boil down to the strength of a network. The future of blockchain acts could be attributed to quantum computing which does not exist as of now.