What is a Blockchain? and why?

What is a Blockchain?

For the uninitiated, a blockchain is a distributed database between the nodes of a CPU network. Electronically storing information in digital format, blockchains are known for their central role in cryptocurrency systems, such as Bitcoin, for maintaining a decentralized records of transactions. These transactions are secure and safe. The specialty of a blockchain is its strong ability to keep records of data secure and protected. This generates trust for third parties using the system.

Key difference between databases and blockchain is the structure of each and the manner in which information is stored.

Structure- blockchain collects information in clusters, known as blocks. A chain of information blocks is formed. Blocks are store houses of information clusters. These blocks are linked to older store houses or blocks. Thus, a chain of data storehouses of information called blocks is formed leading to a ‘Blockchain’. More fresh information clusters are added to the chain in new block systems in definitive timelines. Each block in the chain is given an exact time and date stamp, when it is added to the chain. Information timelines are not reversible. Implemented in a blockchain is decentralized.

On the other hand, databases usually store data into tables.

How did Blockchain find its niche?

Blockchain which is an open cryptographically protected list of records is decentralized. What do we mean by decentralized?

It is stored not by one centralized entity, like a social network, but split between the heaps of users on the blockchain community -i.e., it is decentralized. Blockchains are secure. They are resistant to fraud. With no central authority, blockchains of social networking sites present the opportunity to bring the personal data back to the users granting them more control over its usage.

Blockchains were first introduced as a cryptocurrency technology. Over the past decade, it has come a long way to become one of the most desired technologies for any industry from finance to public sector.

We present an interesting history of blockchain below:

2008-2013- Bitcoin

In 2008, Satoshi Nakamoto released a white paper on a purely peer-to-peer electronic cash version. This white paper was soon to become a starting point of blockchain history and the first blockchain product, Bitcoin (BTC) cryptocurrency, came to the market. Over the years, Bitcoin was taking its initial steps:

•         2009-the first transaction and receiving its traditional equivalent of currencies
•         2010-2011-the first payment with the BTC and on par with the US Dollar
•         2013-the first hearing of the US Senate on digital currency resulted in BTC price escalating to $750 and a ‘gift’ from the chairman of the Federal Reserve

2014-2018- Smart Contracts and Ethereum

 Bitcoin became a success. Hence, developers shifted focus to the blockchain as a technology that could be utilized for several purposes and in different domains outside cryptocurrency and finance.

 In 2015, Vitalik Buterin a cryptocurrency researcher and a co-founder of Bitcoin introduced the second public blockchain Ethereum. He realized that BTC needed scalability and had its restrictions.

Moreover, the new platform offered smart contracts that could easily process based on a set of criteria established in the Ethereum blockchain. Business corporations soon realized the new potential of blockchain. The blockchain boom began. Within a year, in 2017-2018, the BTC price jumped from around $1000. to $20000. Therefore, in 2017, virtual currencies became officially recognized in Japan. Subsequently, in 2018, Switzerland began accepting tax payments in BTC.

Thus, the Ethereum platform grew into a base for several decentralized blockchain applications and services.