In short, blockchain is a transaction logging system in many databases that are widely distributed on many computers, each containing an identical record. With this decentralized record of transactions, it is almost impossible to hack or unilaterally alter it, without mastering the vast majority of all databases or computers. The records of these transactions will be loaded into interconnected blocks. When one block is full, it will create the next block connected to the previous block. Transaction logs loaded in the generated block, will not change. This shows that blockchain has immutable properties, which are chronologically arranged and secured by cryptography.
How does blockchain works?
How Blockchain works
When a block stores the new data, it will be added to the blockchain. It will only occur if all the following four things happen:
- A transaction must be occur. Take Shopee as an example, after checkout a block will group together potentially thousands of transactions, so the Shopee purchase will be packed in the block along with other user’s transaction information as well.
- The transaction has been verified. After making the purchase, the transaction must be verified with the other public records of information, like the Securities Exchange Commission and local library.
- The transaction must be stored in a block. After the transaction has been verified, it will get the green light. The transaction’s amount, user details, Shopee digital signature will all been stored in a block.
- The block is given a hash. Once all the block's transactions have been verified, it will contain a unique identifying code called a hash. The block is also given the hash of the most recent block added to the blockchain. The hashed block then will be added to the blockchain.
The blockchain will become publicly available for anyone to view when the new block is added. Exp, transaction time, from where, by who, etc.
Why use blockchain
The basic advantages of blockchain technology are decentralized, immutability, security, and transparency. The blockchain technology allows verification without having to be dependent on third-parties. All the data in a blockchain is append only and cannot be altered or deleted by any parties. The transactions that take place are transparent and only authorised people can view it. The origin of all ledger can be tracked along the chain to its point of origin, removes the risk of duplicate entry or fraud.
When we should use blockchain
We can use blockchain when we want to manage and secure the digital relationships or keep a decentralised, shared system of record. Anytime we want to keep a long-term, transparent record of assets (for example, to record property or land rights), blockchain could be the ideal solution. ‘Smart contracts’, in particular, are great for facilitating digital relationships and transactions. With a smart contract, automated payments can be released when parties in a transaction agree that their conditions have been met.
Where/who (industry) blockchain can be applied
Initially, blockchain has caused a lot of confusion, especially in the technology sector. Today, more and more industries are using this technology to create more efficient, transparent, and secure systems. Among the industries that can use this blockchain in the medical industry. Properly implemented, blockchain can take a series of steps to the next level, reduce costs, increase security and reliability, eliminate error data movement, and enable real-time supply chain transparency.