As the world has entered into a new era after pandemic the people are also now sustaining and entering into a new phase of storing their financial values. Though paper money has carried its own value but now is the age of the digital currency. There is a paradigm shift in medium of exchange currency which is neither associated with any government nor with any physical forms of coins and currency. This has become a medium of exchange which is generated, stored and transferred electronically. People have started investing in these digital currencies as they are safe. These have now become more popular.
Introduction
Crypto currency is a secret or private currency like Bitcoin, Dogecoin, Ripple, Ethrum etc. These are maintained in a public ledger that involves many computers and people which is known as person to person network or peer to peer network. A revolutionary technology takes care of the whole network which is called the Block Chain Technology. All the transactions made in the crypto currencies are actually recorded in the blocks. Number of blocks together is interconnected in a form of chain. All the transactions made are transparent so any misleading or fraudulent activities are easily detected. All calculations are done so accurate that it becomes one of the safest ways of the transactions. The process of such transactions made or validating the same is called Mining and the people involved in the process of development are called Miners.
Recordkeeping technique for cryptocurrency i.e. Bitcoin is actually known as Block chain Technology. It is a type of database that collects information and store in computers. The data are set in a tabular form so that searching and filtering of any specific data can be done easily. This database can be accessed by multiple users. The purpose is to record and distribute the information but restricts the use to edit the same. This system started in 1991 and was introduced by Stuart Haber and W. Scott Stornetta. But the real world application was with the introduction of Bitcoin in 2009.
The block chain collects information in groups and these are called Blocks. These have limited storage capacity, so if one block is transcribed with the information automatically it forms another block.
How does it work?
The chain contains a lot of information. Every block contains a cryptographic hash of the previous block. This hash is generated for every transaction and is basically a string of numbers and letters. The input of letters and numbers is encrypted to a fixed length of output. This hash does not only depend on the transaction but also depends on the previous blocks. Hence, a minor change in the transaction creates a new hash that affects the whole system. This helps to prevent any fraudulent activities and can easily be detected hence proving it as a secure option.
The block chains are spread in many computers and are called Nodes. These nodes approve the transactions by the hash created which are encrypted in blocks. The nodes frame the infrastructure and store, spread and preserve the block chain which automatically updates itself in every 10 minutes.
Usage of Blockchain
Crypto currency: It acts as a special type of database for Bitcoin that stores all the transaction. The currency options are spread in the computer networks which gives an autonomy to operate without any Central authority. All monetary transactions stored in the blocks. This way the risk is minimised and processing & transactions fees are also eliminated.
Banking & Financial institutions: These have an advantage on Banking & Financial institutions. It has achieved the most through the integrating block chains that helps to complete a transaction in only 10 minutes. Possibility of Point exchange has become much easier between the banks and institution.
Healthcare sector: This sector uses this technology to secure the patients’ medical record. Private Key can also be used to secure the patient’s privacy.
Supply Chain: It can also be used by supply chain industry to keep the record of their purchases to verify the products authenticity.
Voting system: Fraud and manipulation of votes can be prevented as its protocols save the transparency of the voting system.
Decentralised Finance (DeFi): Block chain has enabled the usage of the network by anyone. It has enabled Decentralized Finance (DeFi) services for the crypto currency and its uses in industry. It has provided many globally accessible services in spot trading, lending and borrowing, savings and yield products, market prediction, Asset exchange and swap and stable coins etc.
Block Chain Games: Even to make it more accessible and to increase the number of users, free block chain games have been introduced where players can trade their in-game assets and access is granted to them to earn rewards in form of crypto-currency.
Advantages
- Transparency is maintained in every transaction
- It is secure & privately managed.
- Accuracy can be easily improved.
- It has minimised the cost reduction as no third party verification is required.
Disadvantages
- Due to high speed it can carry only limited transactions.
- It has been used in many illegal activities.
Conclusion
Block chain is in its sprouting stage and has a lot of scope for evolution in the future. Many trends are still undiscovered but it can surely revolutionize the entire world and rise to become the one stop solution to secure the trust in finance and global trade. In recent times, it has surely proven to be the fuel for innovations and many developments.
