Blockchain is a distributed recording technology used to store data in a transparent and decentralized manner. The idea behind the creation of the blockchain is to create an immutable record of transactions or information by linking blocks of data, which contain encrypted information of a transaction (using cryptography) and are interconnected in a chained manner.
Blockchain technology became known globally thanks to the popularity of the Bitcoin cryptocurrency; however, different sectors use blockchain technology. Following, we will learn about the main characteristics of this technology:
Decentralized system
The blockchain is a technology based on a decentralized system since the users control the network operation without requiring a central authority. Data transfer in a blockchain does not need a “third party” to certify the information since it is distributed among multiple independent and equal nodes, which examine the data and validate it autonomously.
Transparency
All transactions made on the blockchain are visible to all network users, as every node in the network has access to the same information, creating a high degree of transparency and trust in the system. Significantly, each transaction on the blockchain is permanently recorded and can be traced back to its origin; this allows participants to examine the transaction history and verify the authenticity and integrity of the data.
Verification of traceability
Blockchain is identified as a system that allows tracking and verifying the traceability of all the information that has been recorded in each of the nodes along the entire blockchain, which allows visualizing each of the operations that have been carried out. Importantly, assets on the blockchain often have unique identifiers (hash codes or specific addresses), which make it easy to track the provenance and movement of assets along the blockchain.
Immutable records
Blockchain technology is characterized as a system whose records are immutable since the information of each of its operations and transactions cannot be changed, modified, or deleted within the network. This feature makes the blockchain work as a digital ledger where all operations are recorded.
System with a high level of security
Blockchain technology comprises a series of distributed and interconnected nodes (forming a network) responsible for recording and providing cryptographic data protection. In this way, the system generates a copy in each node through which the information passes, which makes it difficult to falsify the data recorded along the blockchain. It is essential to note that each of the components that make up the network constantly verifies and validates the rest of the blocks, which provides the system with a high degree of security and reliability.
What do you think about this topic? Do you want to learn more about blockchain technology and its use as a ledger?
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