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What is the blockchain, why is it important, and what are some of its applications?

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What is the blockchain, why is it important, and what are some of its applications?

What is the blockchain

If this technology is so complex, why call it “blockchain?” At its most basic level, blockchain is literally just a chain of blocks, but not in the traditional sense of those words. When we say the words “block” and “chain” in this context, we are actually talking about digital information (the “block”) stored in a public database (the “chain”).

“Blocks” on the blockchain are made up of digital pieces of information. Specifically, they have three parts:

(1) Blocks store information about transactions like the date, time, and dollar amount of your most recent purchase from Amazon. (NOTE: This Amazon example is for illustrative purchases; Amazon retail does not work on a blockchain principle as of this writing)

(2) Blocks store information about who is participating in transactions. A block for your splurge purchase from Amazon would record your name along with Amazon.com, Inc. (AMZN). Instead of using your actual name, your purchase is recorded without any identifying information using a unique “digital signature,” sort of like a username.

(3) Blocks store information that distinguishes them from other blocks. Much like you and I have names to distinguish us from one another, each block stores a unique code called a “hash” that allows us to tell it apart from every other block. Hashes are cryptographic codes created by special algorithms. Let’s say you made your splurge purchase on Amazon, but while it’s in transit, you decide you just can’t resist and need a second one. Even though the details of your new transaction would look nearly identical to your earlier purchase, we can still tell the blocks apart because of their unique codes.

While the block in the example above is being used to store a single purchase from Amazon, the reality is a little different. A single block on the Bitcoin blockchain can actually store up to 1 MB of data. Depending on the size of the transactions, that means a single block can house a few thousand transactions under one roof.

why is it important,

Understanding the meaning of its way of distribution is the key to know why blockchain is used (more and more commonly). Above all, it allows making the database fully decentralized. This way of data distribution raises its quality, safety, and resistance to censorship.

For a long time, blockchain was a domain of Bitcoin and other digital currencies. Because of its features, this technology is the best protection for the monetary and identity data, However, it starts being more and more present in the other branches of the business. The reason above all is the safety it provides. If you are determined to raise its level, visit createIT to search for various solutions.

#1 Decentralization of data

The decentralization of data decreases many risks that the centralized systems are prone to because of the way they function. The ultimate control of one party brings the danger of possible cheat and pressure in many forms. Decentralization reduces it by sharing the blocks of data between more than one unit. There are various variants - from two entrepreneurship up to a spread network of parties, the identity of which is not necessarily known.

The security of data is closely connected to the implementation of blockchain. The blocks constructed from the data are encrypted and linked together what makes sharing digital information more secure. It's an advantage not only for the company but also for its customers. By implementing this technology, you can raise the trust of your clients.

#2 Reducing costs

The main reason why many companies decide to switch to distributed ledger. How does the blockchain influence operational costs? By removing the party in between your server and the data, the access is easier and faster. Blockchain technology increases the speed and efficiency of processing the data. It automates the process, making it less time-consuming. Also, it reduces the risk of human fails, which may affect the traditional process. That means less financial loss

#3 Easier tracing

This feature may be especially important for your company if you distribute the products basing on a complicated supply chain. Tracing all the transaction will be easier for you if using the blockchain technology. If all the data is stored on the distributed ledger, it's very easy to investigate all the history of the transaction. It may be very helpful in terms of raising the security measures.

The presented advantages are only examples of how this technology can positively influence your business. If you are not sure how to implement it, try Blockchain consulting to get professional support.

what are some of its applications?

• Secure sharing of medical data
• Music royalties tracking
• Cross-border payments
• Real-time IoT operating systems
• Personal identity security
• Anti-money laundering tracking system
• Supply chain and logistics monitoring
• Voting mechanism
• Advertising insights
• Original content creation
• Cryptocurrency exchange
• Real estate processing platform

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