In recent years, one word has been continuously buzzing around the tech world, ‘Blockchain’. Maybe, it is because of cryptocurrencies, such as Bitcoin. A huge percentage of the crowd still does not know, what is Blockchain technology. For them, it is something that rules the digital world. It is difficult to understand the meaning of Blockchain in layman’s language. But by digging inside a little into it, we can surely come to know about it.
As Blockchain technology continues to rise and integrated within different sectors, it has become more user-friendly and businesses are ready to adopt it. This evolving technology has brought a massive revolution and thus the demand for blockchain solutions is also at its peak. Businesses are looking to hire a good blockchain development company that can provide a reliable solution to stay competitive in the world of Blockchain.
If you are also new to blockchain and figuring out how blockchain works, then this blog will surely help you to get a good understanding of the basic concepts of blockchain. So let’s begin with what blockchain technology is.
What is Blockchain technology?
Blockchain technology came into existence to make it difficult or impossible to forge, manipulate or, change data. Also, transactions across the network remain secure and hack-proof with the use of blockchain technology. It is primarily a DLT i.e. Distributed Ledger Technology which is a secured digital system used to record the transactions. In the blockchain network, there is a copy of every ledger in each of the computers to avoid failure. As well, all these copies always remain validated and updated. Rather than storing data in a conventional form, in blockchain, the data is stored in the form of blocks that are chained together digitally.
Why is Blockchain so popular?
In the past few years, Blockchain has gained so much popularity and attention. Entrepreneurs across the world are looking to hire blockchain developers for accomplishing their aim of blockchain app development to scale their businesses.
But the question comes – Why blockchain is so much popular? What is the reason behind its whooping popularity? So, let’s understand what the concept behind it is.
Every business needs to perform record keeping of all the day-to-day transactions and data. It is one of the most crucial parts of any business. Majorly, this information is managed by a third-party or by an in-house team. But in both cases, the time, cost, and efforts exhausted are too much. To resolve these issues, Blockchain enters into the picture and helps facilitate rapid and secured transactions.
Size of the blockchain technology market worldwide from 2018 to 2025
(Source: Statista)
As per the study, the blockchain technology revenues is about to snowball in the coming years. The market is about to reach approximately 39 billion U.S. dollars by the year 2025.
Blockchain technology helps support multiple applications from various industries comprising manufacturing, banking, supply chain, and many more. There are enormous benefits of integrating blockchain technology into businesses. In the blockchain, there is a digital signature that makes the transactions fraud-free. With these digital signatures, the corruption of data becomes impossible. All the blockchain transactions work on a decentralized system that makes everything faster, safer, and smoother. And fortunately, it helps to eliminate all the long and tiring processes resulting in time and cost savings.
With the popularity and wide integration of blockchain technology within different sectors, entrepreneurs are keen to use blockchain development services to take their businesses to the next level.
Types of Blockchain
Before discussing how blockchain works, it is important to know how many types of blockchain do exist. Primarily, four types of blockchain are widely popular around the world. Let’s understand these blockchain types one-by-one:
- Public Blockchain
Public blockchain networks played a vital role in making distributed ledger technology popular worldwide. There are various cryptocurrencies such as Bitcoin, etc. that have been originated from this network only. Several issues and security threats have been eliminated with the introduction of the public blockchain. Here, data distribution takes place across the peer-to-peer network instead of storing in one single place. A consensus algorithm is used in the public blockchain to verify information, proof of work, and proof of stakes.
- Private Blockchain
There are closed networks on which private blockchains operate and thus these networks work so efficiently for private businesses. For various security aspects, customizing accessibility, and setting preferences for authorization, businesses use these private blockchain networks. Overall, there is only one authority that manages this network.
- Consortium Blockchain
These blockchain networks consist of components both from the public as well as private blockchain networks. In the initial phase, they are comparatively difficult to set up. But once these are running, it provides optimum security. Also, these blockchain networks are suitable for better collaboration with various organizations.
- Permissioned Blockchain
These blockchain networks are also famous for the name hybrid blockchains. These are primarily similar to private blockchains that offer unique access to a few authorized individuals. To get the most adequate and proficient results, businesses prefer using these networks. It also allows us to build the best structure at the time of selecting who would be the network participants and who are authorized to perform transactions.
From all the above-mentioned blockchain network types, businesses select as per their needs and requirements. Once finalized, it is easy for them to get dedicated developers for hire that can build top-notch solutions by matching the expertise of the developers with the business requirements.
How does Blockchain technology work?
After understanding what blockchain technology is and why it is so popular, you must also understand how blockchain works. If you are looking to get blockchain developers for hire, it is essential how they will start the process of blockchain development. And if you already know how it works, you can give your input at different stages of the development process.
In the past few years, businesses are inclined toward integrating blockchain technology into their operations and all functions. Blockchain is still new for some sectors, but it holds the potential to bring a revolutionary change to them too. But before that, it becomes necessary to understand how it will work to bring that notifying change in the businesses.
It is a combination of three different technologies i.e., the cryptographic keys, a peer-to-peer network, and a computing means. The cryptographic keys are also divided into two parts, the public key, and the Private key. The primary purpose of these keys is to perform secured and successful transactions. Every individual receives two keys to create a digital identity reference for themselves and it is one of the most vital parts of Blockchain technology.
This identity is popularly referred to as the digital signature in the world of cryptocurrency that helps to control and authorize transactions. These digital signatures are further combined with the peer-to-peer network, a group of people who use their digital signatures for reaching a consensus at the time of issues. For performing and undertaking various digital interactions over the network, these cryptography keys are used by blockchain users.
Now let’s understand the working of blockchain step-by-step:
- ‘Block’ of Data
Whenever any transaction takes place, it is stored in the form of a block, and thus, it is a block of data. These transactions depict the asset movement which either can be tangible or intangible. These blocks store data as per your choice and requirement. It means, it is in your hands what, who, where, when, or how the information will be stored.
- Block Connection
There is a connection between the blogs as they form a chain. This chain is of data where there is a movement of an asset from one individual place to another. These blocks also let us know the sequence as well as the time of transactions. Each block is linked securely with its corresponding blogs, i.e., one before and one after it, so that there is no scope for any sort of data alteration.
- Irreversible Chain
There is an irreversible chain formed where all the transactions are securely blocked or linked together. Every additional block helps to improve the authenticity of the previous block and thus, the entire blockchain is verified. Hence, it helps to make the blockchain completely tamper-evident, secured, and immutable, so that no unauthorized changes can take place in the data stored. It helps to save the information from being tampered with by any malicious thing. It does not let anyone create a ledger of transactions that cannot be trusted by the network members.
Once you have understood how the blockchain works, it is easy to understand how the software development company will work on your project. Gaining this knowledge also helps to hire dedicated developers as it allows you to analyse their expertise and skills in blockchain development.
Summing Up,
Blockchain is ruling the world and so the businesses. Everyone around the corner is eager to take benefit of this technological advancement. Blockchain applications not only save time and money but also bring transparency and fairness in the business operations. It offers various benefits to businesses to reach new heights and earn better revenues. If you are also eager to integrate blockchain technology into your business functions, you can hire a good blockchain development company for your project.
Author BIO
Rohan Singh is a Chief Executive Officer at SemiDot Infotech, Top rated multi award winning Mobile Application development company providing a full suite of services and solutions to small, medium, big enterprises, product companies & new-age start-ups.
He has extensive experience working for multinational companies and know what it takes to take a company to the next level. He has a master’s degree in computer science. Rohan finds covering the tech world to be an exciting and engaging experience as each day brings new and ground-breaking technologies to explore and write about.
