A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Blockchain has been in a lot of buzzes these days. And that is mainly because it is the backbone of the very famous cryptocurrency in the world - Bitcoin. Many Governments and leading Banks have decided to bring many of their conventional transactions based on the Blockchain concept. The applications and potential of this framework are huge and are considered to be changing the way transactions are made in various domains.
Blockchain is nothing but a DLT with a specific set of features. It is also a shared database – a log of records – but in this case shared by means of blocks that, as the name indicates, form a chain. The blocks are closed by a type of cryptographic signature called a ‘hash’; the next block begins with that same ‘hash’, a kind of wax seal. That is how it is verified that the encrypted information has not been manipulated and that it can’t be manipulated.
Blockchain technology has caused a high wave of innovation and has been there since 2008. Ethereum blockchain allows evidence of an agreement to be automatically written to Ethereum. For customers who want evidence of agreements to exist in a neutral environment, not owned by any particular entity, this solution is ideal. Anyone with a copy of the agreement can check it against the blockchain stored evidence to verify the copy’s integrity. For privacy and security, the evidence is a one-way cryptographic has like a digital fingerprint of the original.
Selectively share the record
The content of the original is never written to the blockchain or exposed publicly and, the one-way cryptographic hash cannot be used to work backward to recreate the original. Many research projects and startups are exploring blockchains for distributed identity management. This would allow individuals to control and selectively share the definitive record of who they are.
A smart contract turns a contract into something like a computer program. The Internet-connected program monitors data and triggers actions relevant to the contract’s terms. For example, a crop-insurance smart contract might use a trusted Internet feed of weather data. If the temperature goes above 85 degrees Fahrenheit in May, the smart contract will automatically trigger a crop-insurance payout, via the Internet. This total automation eliminates ambiguity and promises large savings of time and effort for all parties involved. Although the field of smart contracts is still emerging, and a blockchain is only one of many ways to enable smart contracts, blockchain technology is catalyzing interest in smart contracts. Blockchain will now be used forever as it has created a vast image in everyone’s life and people trust it more.
Blockchain is a public electronic ledger -- similar to a relational database -- that can be openly shared among disparate users and that creates an unchangeable record of their transactions, each one time-stamped and linked to the previous one. Each digital record or transaction in the thread is called a block (hence the name), and it allows either an open or controlled set of users to participate in the electronic ledger. Each block is linked to a specific participant.