6 Features of Blockchain Technology

There’s a lot of hype around blockchain technology, but most people don’t know exactly what it is or how it works. In fact, according to the Global Blockchain Business Council (GBBC), 91% of executives aren’t currently using blockchain technology in their company – and just 1% are in short-term planning or active development.

This guide will help you understand what blockchain technology is and how it works so you can determine if it’s something that might be good for your business.

1) Immutability

A blockchain can be used to create a ledger of transactions that everyone can see, but nobody (not even a system administrator) can change. That makes blockchain technology especially well-suited for banking and other financial uses that involve record keeping and verification. Also, because blockchains are decentralized across multiple nodes, there’s no single point of failure so it’s more difficult to disrupt or compromise them. Blockchains also resist data tampering and revision — which is essential when you need to keep track of records such as digital currency transactions or land registries in countries with weak government institutions.

2) Decentralization

The most obvious feature of blockchain technology is its decentralized nature. By not being tied to a central server, blockchain-based solutions cannot be manipulated by any single individual or entity. And since all networks are open, permissionless and distributed, anyone with an internet connection can use them. There are three types of blockchain technologies: public blockchains, private blockchains and consortium blockchains. Public blockchains such as Bitcoin allow anyone in the world to read or write to them; they have no access restrictions whatsoever.

3. Enhanced security

An immutable and unhackable digital ledger provides unparalleled security for digital transactions. Even if a hacker does manage to hack into one computer, it’s not like they can compromise an entire network because data is shared across multiple independent nodes. In today’s world where cyberattacks and data breaches are at an all-time high, blockchain technology is a breath of fresh air. It will help secure your information in areas such as healthcare and finance for years to come.

4. Consensus

In a blockchain, consensus occurs when all participants in a system agree that something is true. This can be achieved by allowing new entries to be added to a shared database only if they meet certain requirements. For example, members of an organization might require that new entries relate only to transactions approved by multiple parties involved in them. Or if members want new entries to meet minimum standards before they’re added—for example, being checked against past records—then permissioned blockchain platforms should be used. A permissioned platform will not allow anyone who has not been vetted and authorized by other platform members to participate; therefore, no bad actors will be able to add fraudulent information or counterfeit goods, nor will users have a say in what gets added without additional levels of vetting.

Self-Executing Transactions

Because blockchain transactions are recorded on a digital ledger, it’s possible to make smart contracts that automatically execute when certain conditions are met. It’s similar to a self-fulfilling prophecy: if something happens and no one stops it, then it will happen by default. For example, you can set up a contract with someone to send them $1 million if an earthquake of 7.0 magnitude occurs in Los Angeles within one week. The transaction is only complete when your data shows proof that such an event occurred. So no one has to do anything for the contract to be fulfilled—it runs on its own.

Distributed Ledgers

Since blockchain is distributed, a digital ledger is available to multiple nodes in a network. Because there’s no central database, ledgers are automatically synced across all nodes on a real-time basis; as new transactions occur, each node receives a copy and all changes are reflected everywhere. This process also makes it difficult for bad actors to disrupt an entire system—if one node fails or goes offline, there’s no risk of corruption spreading to other nodes in the network. This characteristic creates redundancy and can help safeguard against errors and security breaches.

Hussain Blogs

Search This Blog