How is blockchain transforming transactions?

A block is a present or current part of a blockchain. The block records all the transactions. Once the recording is complete, it goes to the blockchain which has a permanent database. As soon as one block is completed a new one is produced or generated.

There are innumerable numbers of such blocks in a blockchain. They are connected to each other in a suitable linear and sequential order. Every new block is connected by the hash with the previous one.

The blockchain has all information about the entire users’ balance and addresses. A complete record is kept right from the day a block is formed to most recent one.

Blockchain is designed in such a manner that its transaction once written or recorded cannot be deleted. Since the blocks are added through cryptography there cannot be any unauthorized alteration or tamperering.

Needed data is distributed but one cannot copy it. Few people feel that ever increasing size of blockchain will create issues of storage and synchronization.

Interrelating blockchain with Bitcoin

Blockchain as a technology was innovated for Bitcoin. It is not regulated by any central authority. All the users control and authenticate transactions between a payer and receiver for goods and/or services. This removes the need of third party to store or process payments. Blockchain has other application in industries apart from Bitcoin.

All the transactions are recorded by people into the blocks and at the end to the blockchain. The transaction is verified and broadcast by other Bitcoin users. On an average, every new block is added to the end of blockchain approximately every 10 minutes which is through mining.

Blockchain database is shared by all the nodes participating in the system which is based on Bitcoin protocol. Computers are connected to a network. Every connected computer in the network gets a copy of the records and has a proof of all the transactions executed. One can get accurate information about facts regarding the value of a specific address of the past.

Each block on a blockchain is like an individual bank statement (analogy with the bank) and blockchain can be called full history of financial transactions of the bank.

Since blockchain is a distributed database system and an open electronic ledger for all parties. It simplifies all business operations. It is because of blockchain has many other varied applications. Blockchain technology is attracting stock exchanges, insurance, music, and internet-of-things (IoT).

Distributed ledger technology has a lot of potential to simplify present business operation. Payment networks and expensive accounting of financial industry are being replaced by new models based on the blockchain. It maybe the financial institutions will be able to free up billions of dollars which are blocked up for some other uses.

In the initial stages, banks are hesitating to use this technology because of their concern regarding frauds. But now they are realizing that blockchain is faster and economical for trades, transfer and other transactions.

The first international block chain transaction was between Brighann Cotton Marketing, Australia and U.S division in Texas for transfer of cotton bales which were sent to Qingdao in China. The deal was valued at $35,000 in 2016 and was brokered by Commonwealth Bank of Australia and Wells Fargo & Co.

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