News
What is Blockchain Technology? How Does Blockchain Work? [Updated]
![What is Blockchain Technology? How Does Blockchain Work? [Updated]](https://chainfeed.info/wp-content/uploads/2024/07/1720422010_What-is-Blockchain-Technology-How-Does-Blockchain-Work-Updated.png)
Reviewed and fact-checked by Sayantoni Das
Over the past few years, you have consistently heard the term ‘blockchain technology,’ probably regarding cryptocurrencies, like Bitcoin. In fact, you may be asking yourself, “what is blockchain technology?” It seems like blockchain is a platitude but in a hypothetical sense, as there is no real meaning that the layman can understand easily. It is imperative to answer “what is blockchain technology, “including the technology that is used, how it works, and how it’s becoming vital in the digital world.
As blockchain continues to grow and become more user-friendly, the onus is on you to learn this evolving technology to prepare for the future. If you are new to blockchain, then this is the right platform to gain solid foundational knowledge. In this article, you learn how to answer the question, “what is blockchain technology?” You’ll also learn how blockchain works, why it’s important, and how you can use this field to advance your career.
What Is Blockchain Technology?
Blockchain is a method of recording information that makes it impossible or difficult for the system to be changed, hacked, or manipulated. A blockchain is a distributed ledger that duplicates and distributes transactions across the network of computers participating in the blockchain.
Blockchain technology is a structure that stores transactional records, also known as the block, of the public in several databases, known as the “chain,” in a network connected through peer-to-peer nodes. Typically, this storage is referred to as a ‘digital ledger.’
Every transaction in this ledger is authorized by the digital signature of the owner, which authenticates the transaction and safeguards it from tampering. Hence, the information the digital ledger contains is highly secure.
In simpler words, the digital ledger is like a Google spreadsheet shared among numerous computers in a network, in which, the transactional records are stored based on actual purchases. The fascinating angle is that anybody can see the data, but they can’t corrupt it.
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
Dive into the transformative world of blockchain technology with our intensive Cyber security Bootcamp. Uncover the revolutionary potential of blockchain while honing your skills in safeguarding these decentralized systems. From understanding the intricacies of smart contracts to fortifying digital transactions, this bootcamp equips you to navigate the evolving landscape of cybersecurity within the blockchain domain. Don’t miss this opportunity to become a proficient cybersecurity professional in the realm of blockchain.
Why is Blockchain Popular?
Suppose you are transferring money to your family or friends from your bank account. You would log in to online banking and transfer the amount to the other person using their account number. When the transaction is done, your bank updates the transaction records. It seems simple enough, right? There is a potential issue which most of us neglect.
These types of transactions can be tampered with very quickly. People who are familiar with this truth are often wary of using these types of transactions, hence the evolution of third-party payment applications in recent years. But this vulnerability is essentially why Blockchain technology was created.
Technologically, Blockchain is a digital ledger that is gaining a lot of attention and traction recently. But why has it become so popular? Well, let’s dig into it to fathom the whole concept.
Record keeping of data and transactions are a crucial part of the business. Often, this information is handled in house or passed through a third party like brokers, bankers, or lawyers increasing time, cost, or both on the business. Fortunately, Blockchain avoids this long process and facilitates the faster movement of the transaction, thereby saving both time and money.
Most people assume Blockchain and Bitcoin can be used interchangeably, but in reality, that’s not the case. Blockchain is the technology capable of supporting various applications related to multiple industries like finance, supply chain, manufacturing, etc., but Bitcoin is a currency that relies on Blockchain technology to be secure.
Blockchain is an emerging technology with many advantages in an increasingly digital world:
-
Highly Secure
It uses a digital signature feature to conduct fraud-free transactions making it impossible to corrupt or change the data of an individual by the other users without a specific digital signature.
-
Decentralized System
Conventionally, you need the approval of regulatory authorities like a government or bank for transactions; however, with Blockchain, transactions are done with the mutual consensus of users resulting in smoother, safer, and faster transactions.
-
Automation Capability
It is programmable and can generate systematic actions, events, and payments automatically when the criteria of the trigger are met.
Structure and Design of Blockchain
A blockchain is a distributed, immutable, and decentralized ledger at its core that consists of a chain of blocks and each block contains a set of data. The blocks are linked together using cryptographic techniques and form a chronological chain of information. The structure of a blockchain is designed to ensure the security of data through its consensus mechanism which has a network of nodes that agree on the validity of transactions before adding them to the blockchain.
Blocks:
A block in a blockchain is a combination of three main components:
1. The header contains metadata such as a timestamp which has a random number used in the mining process and the previous block’s hash.
2. The data section contains the main and actual information like transactions and smart contracts which are stored in the block.
3. Lastly, the hash is a unique cryptographic value that works as a representative of the entire block which is used for verification purposes.
Block Time:
Block time refers to the time taken to generate a new block in a blockchain. Different blockchains have different block times, which can vary from a few seconds to minutes or may be in hours too. Shorter block times can give faster transaction confirmations but the result has higher chances of conflicts but the longer block times may increase the timing for transaction confirmations but reduce the chances of conflicts.
Hard Forks:
A hard fork in a blockchain refers to a permanent divergence in the blockchain’s history that results in two separate chains. It can happen due to a fundamental change in the protocol of a blockchain and all nodes do not agree on the update. Hard forks can create new cryptocurrencies or the splitting of existing ones and It requires consensus among the network participants to resolve.
Decentralization:
Decentralization is the key feature of blockchain technology. In a decentralized blockchain, there is no single central authority that can control the network. In decentralization,the decision-making power is distributed among a network of nodes that collectively validate and agree on the transactions to be added to the blockchain. This decentralized nature of blockchain technology helps to promote transparency, trust, and security. It also reduces the risk to rely on a single point of failure and minimizes the risks of data manipulation.
Finality:
Finality refers to the irreversible confirmation of transactions in a blockchain. If and when a transaction is added to a block and the block is confirmed by the network, it becomes immutable and cannot be reversed. This feature ensures the integrity of the data and prevents double spending, providing a high level of security and trust in Blockchain Types & Sustainability
Openness:
Openness in blockchain technology makes the blockchain accessible to anyone who intends to participate in the network. This implies that it is open for all and anyone can join the network, validate transactions, and can add new blocks to the blockchain, so long as they know the consensus rules. Openness promotes inclusivity, transparency, and innovation, as it allows for participation from various stakeholders.
Public Blockchain:
It is a kind of blockchain which is open for the public and allows everyone to join the network to perform transactions and to participate in the consensus process. Public blockchains are transparent, because all transactions are publicly recorded.
How Does Blockchain Technology Work?
In recent years, you may have noticed many businesses around the world integrating Blockchain technology. But how exactly does Blockchain technology work? Is this a significant change or a simple addition? The advancements of Blockchain are still young and have the potential to be revolutionary in the future; so, let’s begin demystifying this technology.
Blockchain is a combination of three leading technologies:
- Cryptographic keys
- A peer-to-peer network containing a shared ledger
- A means of computing, to store the transactions and records of the network
Cryptography keys consist of two keys – Private key and Public key. These keys help in performing successful transactions between two parties. Each individual has these two keys, which they use to produce a secure digital identity reference. This secured identity is the most important aspect of Blockchain technology. In the world of cryptocurrency, this identity is referred to as ‘digital signature’ and is used for authorizing and controlling transactions.
The digital signature is merged with the peer-to-peer network; a large number of individuals who act as authorities use the digital signature in order to reach a consensus on transactions, among other issues. When they authorize a deal, it is certified by a mathematical verification, which results in a successful secured transaction between the two network-connected parties. So to sum it up, Blockchain users employ cryptography keys to perform different types of digital interactions over the peer-to-peer network.
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
Types of Blockchain
There are different types of blockchains. They are as follows:
Private Blockchain Networks
Private blockchains operate on closed networks, and tend to work well for private businesses and organizations. Companies can use private blockchains to customize their accessibility and authorization preferences, parameters to the network, and other important security options. Only one authority manages a private blockchain network.
Public Blockchain Networks
Bitcoin and other cryptocurrencies originated from public blockchains, which also played a role in popularizing distributed ledger technology (DLT). Public blockchains also help to eliminate certain challenges and issues, such as security flaws and centralization. With DLT, data is distributed across a peer-to-peer network, rather than being stored in a single location. A consensus algorithm is used for verifying information authenticity; proof of stake (PoS) and proof of work (PoW) are two frequently used consensus methods.
Permissioned Blockchain Networks
Also sometimes known as hybrid blockchains, permissioned blockchain networks are private blockchains that allow special access for authorized individuals. Organizations typically set up these types of blockchains to get the best of both worlds, and it enables better structure when assigning who can participate in the network and in what transactions.
Consortium Blockchains
Similar to permissioned blockchains, consortium blockchains have both public and private components, except multiple organizations will manage a single consortium blockchain network. Although these types of blockchains can initially be more complex to set up, once they are running, they can offer better security. Additionally, consortium blockchains are optimal for collaboration with multiple organizations.
Hybrid Blockchains
Hybrid blockchains are the combination of both public and private blockchains. In a hybrid blockchain, some parts of the blockchain are public and transparent, while others are private and accessible only to authorized and specific participants. This makes hybrid blockchains ideal for use in those cases where a balance is required between transparency and privacy. For example, in supply chain management multiple parties can access certain information, but sensitive data can be kept private.
Sidechains
Sidechains are different blockchains that run parallel to the main blockchain, allowing for additional functionality and scalability. Sidechains enable developers to experiment with new features and applications without affecting the main blockchain’s integrity. For example, sidechains can be used for creating decentralized applications and to implement specific consensus mechanisms. Sidechains can also be used to handle transactions of the main blockchain to reduce congestion and increase scalability.
Blockchain Layers
Blockchain layers refer to the concept of building multiple layers of blockchains on top of each other. Each layer can have its own consensus mechanism, rules, and functionality which can interact with other layers. This ensures greater scalability, as transactions can be processed in parallel across different layers. For example, the Lightning Network, built on top of the Bitcoin blockchain, is a second layer solution that enables faster and cheaper transactions by creating payment channels between users.
The Process of Transaction
One of Blockchain technology’s cardinal features is the way it confirms and authorizes transactions. For example, if two individuals wish to perform a transaction with a private and public key, respectively, the first person party would attach the transaction information to the public key of the second party. This total information is gathered together into a block.
The block contains a digital signature, a timestamp, and other important, relevant information. It should be noted that the block doesn’t include the identities of the individuals involved in the transaction. This block is then transmitted across all of the network’s nodes, and when the right individual uses his private key and matches it with the block, the transaction gets completed successfully.
In addition to conducting financial transactions, the Blockchain can also hold transactional details of properties, vehicles, etc.
Here’s a use case that illustrates how Blockchain works:
-
Hash Encryptions
blockchain technology uses hashing and encryption to secure the data, relying mainly on the SHA256 algorithm to secure the information. The address of the sender (public key), the receiver’s address, the transaction, and his/her private key details are transmitted via the SHA256 algorithm. The encrypted information, called hash encryption, is transmitted across the world and added to the blockchain after verification. The SHA256 algorithm makes it almost impossible to hack the hash encryption, which in turn simplifies the sender and receiver’s authentication.
-
Proof of Work
In a Blockchain, each block consists of 4 main headers.
- Previous Hash: This hash address locates the previous block.
- Transaction Details: Details of all the transactions that need to occur.
- Nonce: An arbitrary number given in cryptography to differentiate the block’s hash address.
- Hash Address of the Block: All of the above (i.e., preceding hash, transaction details, and nonce) are transmitted through a hashing algorithm. This gives an output containing a 256-bit, 64 character length value, which is called the unique ‘hash address.’ Consequently, it is referred to as the hash of the block.
- Numerous people around the world try to figure out the right hash value to meet a pre-determined condition using computational algorithms. The transaction completes when the predetermined condition is met. To put it more plainly, Blockchain miners attempt to solve a mathematical puzzle, which is referred to as a proof of work problem. Whoever solves it first gets a reward.
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
-
Mining
In Blockchain technology, the process of adding transactional details to the present digital/public ledger is called ‘mining.’ Though the term is associated with Bitcoin, it is used to refer to other Blockchain technologies as well. Mining involves generating the hash of a block transaction, which is tough to forge, thereby ensuring the safety of the entire Blockchain without needing a central system.
History of Blockchain
Satoshi Nakamoto, whose real identity still remains unknown to date, first introduced the concept of blockchains in 2008. The design continued to improve and evolve, with Nakamoto using a Hashcash-like method. It eventually became a primary component of bitcoin, a popular form of cryptocurrency, where it serves as a public ledger for all network transactions. Bitcoin blockchain file sizes, which contained all transactions and records on the network, continued to grow substantially. By August 2014, it had reached 20 gigabytes, and eventually exceeded 200 gigabytes by early 2020.
Advantages and Disadvantages of Blockchain
Like all forms of technology, blockchain has several advantages and disadvantages to consider.
Advantages
One major advantage of blockchains is the level of security it can provide, and this also means that blockchains can protect and secure sensitive data from online transactions. For anyone looking for speedy and convenient transactions, blockchain technology offers this as well. In fact, it only takes a few minutes, whereas other transaction methods can take several days to complete. There is also no third-party interference from financial institutions or government organizations, which many users look at as an advantage.
Disadvantages
Blockchain and cryptography involves the use of public and private keys, and reportedly, there have been problems with private keys. If a user loses their private key, they face numerous challenges, making this one disadvantage of blockchains. Another disadvantage is the scalability restrictions, as the number of transactions per node is limited. Because of this, it can take several hours to finish multiple transactions and other tasks. It can also be difficult to change or add information after it is recorded, which is another significant disadvantage of blockchain.
Find Our Blockchain Training in Top Cities |
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
How is Blockchain Used?
Blockchains store information on monetary transactions using cryptocurrencies, but they also store other types of information, such as product tracking and other data. For example, food products can be tracked from the moment they are shipped out, all throughout their journey, and up until final delivery. This information can be helpful because if there is a contamination outbreak, the source of the outbreak can be easily traced. This is just one of the many ways that blockchains can store important data for organizations.
Hyperledger, Hosted by the Linux Foundation
Hyperledger is a global collaboration hosted by The Linux Foundation, including finance, banking, IoT, supply chain, manufacturing, and technology leaders. By creating a cross-industry open standard for distributed ledgers, Hyperledger Fabric allows developers to develop blockchain applications to meet specific needs.
Ten Steps to Your First Blockchain Application
- Understand what Blockchain is and its key components.
- Understand the purpose of your application.
- Create a use case for your application.
- Find out if there’s already an existing blockchain for your purpose.
- Explore the different types of Blockchain platforms available for your application. There are many types of Blockchain, each with its strengths and weaknesses.
- Choose the right platform for developing your app.
- Select the consensus algorithm you will use.
- Learn Solidity – Ethereum’s programming language for smart contracts and DApps (decentralized applications).
- Learn how to use Truffle or Remix – development tools for Ethereum DApps and smart contracts.
- Get an Ethereum account or wallet and buy some Ether (ETH), the currency of the Ethereum network.
Decentralization
Decentralization is difficult to Understand, but it is vital in the world today; decentralization is distributing or dispersing functions, powers, people, or things away from a central location or authority. Within the business world, decentralization typically refers to delegating authority from senior executives to middle managers and other employees further down the organizational hierarchy. The benefits of devolution are many and varied, but the most commonly cited advantages include improved communication, greater employee empowerment, and increased flexibility and responsiveness.
Transparency
One of the most critical aspects of decentralization is transparency. All employees have access to information and decision-making processes in a decentralized organization. This transparency fosters a greater sense of trust and cooperation among employees. Furthermore, it allows employees to hold managers accountable for their decisions.
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
Bitcoin vs. Blockchain
Bitcoin is a digital currency that was first introduced in 2009 and has been the most popular and successful cryptocurrency to date. Bitcoin’s popularity is attributed to its decentralized nature, which means it doesn’t have a central authority or bank controlling its supply. This also means that transactions are anonymous, and no transaction fees are involved when using bitcoin.
Blockchain is a database of transactions that have taken place between two parties, with blocks of data containing information about each transaction being added in chronological order to the chain as it happens. The Blockchain is constantly growing as new blocks are added to it, with records becoming more difficult to change over time due to the number of blocks created after them.
Blockchain vs. Banks
Blockchain has the potential to revolutionize the banking industry. Banks need to be faster to adapt to the changing needs of the digital age, and Blockchain provides a way for them to catch up. By using Blockchain, banks can offer their customers a more secure and efficient way to conduct transactions. In addition, Blockchain can help banks to streamline their operations and reduce costs.
Why is Blockchain Important?
Blockchain is important because it has the potential to revolutionize the banking industry. Banks need to be faster to adapt to the changing needs of the digital age, and Blockchain provides a way for them to catch up. By using Blockchain, banks can offer their customers a more secure and efficient way to conduct transactions. In addition, Blockchain can help banks to streamline their operations and reduce costs.
What is a Blockchain Platform?
A blockchain platform is a shared digital ledger that allows users to record transactions and share information securely, tamper-resistant. A distributed network of computers maintains the register, and each transaction is verified by consensus among the network participants.
Proof of Work (PoW) vs. Proof of Stake (PoS)
Proof of work (PoW) is an algorithm to create blocks and secure the Blockchain. It requires miners to solve a puzzle to create a block and receive the block reward in return.
Proof of stake (PoS) is an alternative algorithm for securing the Blockchain, which does not require mining. Instead, users must lock up some of their coins for a certain time to be eligible for rewards.
Energy Consumption Concerns of Blockchain
The main concern with blockchain technology is its energy consumption. Traditional blockchains like Bitcoin and Ethereum, use a consensus mechanism called PoW( Proof of Work), which requires computational power and electricity to solve complex mathematical puzzles. This energy-intensive process has raised concerns about the environmental impact of blockchain technology because it produces carbon emissions and consumes a huge amount of electricity.
Blockchain or Scalability Trilemma: Decentralization, Security, and Scalability
Blockchain is a distributed database that maintains a continuously growing list of records called blocks. Blockchain is often said to have the potential to disrupt many industries, including banking, law, and healthcare.
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
What are the Benefits of Blockchains Over Traditional Finance?
Blockchain offers several potential advantages over traditional finance. One of the most touted advantages is that Blockchain is decentralized, while traditional finance is centralized. This means there is no single point of failure in a blockchain system. Another advantage of Blockchain is that it is more transparent than traditional finance.
Promising Blockchain Use Cases and Killer Applications
Promising Blockchain Use Cases and Killer Applications: Although there are many potential applications for blockchain technology, there are a few that stand out as having the potential to be truly game-changing. These are often referred to as killer applications. Some of the most promising killer applications for blockchain technology include supply chain management, identity management, and data management.
Promising blockchain use cases and killer applications are being developed every day. The Shiba Inu team is committed to finding and developing the most promising applications for the SHIB community. The team has a proven track record in the cryptocurrency space, and they are committed to creating value for the SHIB community.
How to Invest in Blockchain Technology
Blockchain technology and stocks can be a lucrative investment, and there are several ways to take the next step toward making your first blockchain investment purchase. Bitcoin is typically the first thing that comes to mind when it comes to investing in blockchain technology, and it shouldn’t be overlooked. Aside from Bitcoin, there is also the option of investing in cryptocurrency penny stocks, such as Altcoin and Litecoin. There are also certain apps and services that are in the pre-development phase and that are using blockchain technology to raise funding. As an investor, you can buy coins, with the expectation that prices will go up if the service or app becomes popular. Another way to invest in blockchain technology is to invest in startups built on blockchain technology. Finally, there is always the option to invest in pure blockchain technology.
Traditional Finance and Blockchain Investment Strategies
In traditional finance, there are two main investment strategies: active and passive. Active investing involves picking stocks or other assets, and then holding onto them for a long period of time. Passive investing, on the other hand, involves investing in a basket of assets, and then holding onto them for a long period of time. Both of these strategies have their pros and cons, but there is one major difference between them: active investing is much more risky than passive investing.
How Do Different Industries Use Blockchain?
Blockchain has the potential to streamline processes across many different industries.
- In the supply chain industry, for example, Blockchain can track the movement of goods and materials as they change hands. This would allow for greater transparency and accountability and reduce the risk of fraud.
- In the healthcare industry, Blockchain can be used to secure patient data and streamline the process of billing and claims.
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
What are the Features of Blockchain Technology?
- Blockchain technology is a distributed ledger that is secure, transparent, and immutable.
- Blockchain technology can be used to create a decentralized database that is tamper-proof and has the potential to revolutionize the way we interact with the digital world.
- Blockchain technology is secure, transparent, and tamper-proof.
What are the Key Components of Blockchain Technology?
There are three key components to blockchain technology:
- The distributed ledger, the consensus mechanism, and the smart contracts.
- The distributed ledger is a database that is spread across a network of computers. The consensus mechanism is what allows the network of computers to agree on the state of the ledger.
- The smart contracts are what allows the blockchain to be used for more than just a database.
What are Blockchain Protocols?
The three most common protocols Bitcoin was the first blockchain protocol and is still the most widely used is:
- Bitcoin- Bitcoin is a decentralized digital currency, often referred to as a cryptocurrency. It exists on a decentralized network of computers, often called a blockchain, that keeps track of all transactions made using the currency. Bitcoin uses a proof-of-work algorithm to validate transactions and add them to the blockchain. Bitcoin was the first cryptocurrency to be created and is the most well-known.
- Ripple- Ripple is a cryptocurrency that is similar to Bitcoin. Ripple uses a decentralized network of computers to keep track of all transactions made using the currency. Ripple uses a proof-of-work algorithm to validate transactions and add them to the blockchain. Ripple was created in 2012 and is the second largest cryptocurrency by market capitalization.
- Ethereum- The Ethereum blockchain was initially described in a white paper by Vitalik Buterin in 2013. Buterin, a programmer who was born in Russia and raised in Canada, had been involved with bitcoin from its early days. He was excited by the technology, but he thought that bitcoin needed a scripting language for application development. He decided to create a new platform that would be more general than bitcoin.
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
What is the Difference Between a Database and a Blockchain?
So what is the difference between a database and a blockchain? A database is centralized, meaning that a single entity controls it. This entity can be a company, government, or individual. On the other hand, a blockchain is decentralized, meaning that any entity does not control it.
How is Blockchain Different From the Cloud?
Blockchain is a new technology that is different from the cloud in several ways:
- Blockchain is decentralized, while the cloud is centralized. This means that Blockchain is distributed across a network of computers, while the cloud is stored on a central server.
- Blockchain is immutable, meaning that once data is written to the Blockchain, it cannot be changed.
What is Blockchain as a Service?
Blockchain as a Service is a cloud-based offering that allows customers to build, host, and use their blockchain applications, smart contracts, and functions on the Azure cloud platform. Azure offers integrated services that make it easy to develop, deploy, and manage blockchain applications. Customers can use Azure’s managed services to create and deploy blockchain applications without having to set up and manage their infrastructure.
Basics to Advanced – Learn It All!
Caltech PGP Full Stack DevelopmentExplore Program
What are the Implications of Blockchain Technology?
Blockchain technology has made a great impact on society, including:
- Bitcoin, Blockchain’s prime application and the whole reason the technology was developed in the first place, has helped many people through financial services such as digital wallets. It has provided microloans and allowed micropayments to people in less than ideal economic circumstances, thereby introducing new life in the world economy.
- The next major impact is in the concept of TRUST, especially within the sphere of international transactions. Previously, lawyers were hired to bridge the trust gap between two different parties, but it consumed extra time and money. But the introduction of Cryptocurrency has radically changed the trust equation. Many organizations are located in areas where resources are scarce, and corruption is widespread. In such cases, Blockchain renders a significant advantage to these affected people and organizations, allowing them to escape the tricks of unreliable third-party intermediaries.
- The new reality of the Internet of Things (IoT) is already teeming with smart devices that — turn on your washing machines; drive your cars; navigate your ships; organize trash pick-up; manage traffic safety in your community — you name it! This is where blockchain comes in. In all of these cases (and more), leveraging blockchain technology by creating Smart Contracts will enable any organization to ‒ both — improve operations and keep more accurate records.
- Blockchain technology enables a decentralized peer-to-peer network for organizations or apps like Airbnb and Uber. It allows people to pay for things like toll fees, parking, etc.
- Blockchain technology can be used as a secure platform for the healthcare industry for the purposes of storing sensitive patient data. Health-related organizations can create a centralized database with the technology and share the information with only the appropriately authorized people.
- In the private consumer world, blockchain technology can be employed by two parties who wish to conduct a private transaction. However, these kinds of transactions have details that need to be hammered out before both parties can proceed:
- What are the terms and conditions (T&C) of the exchange?
- Are all the terms clear?
- When does the exchange start?
- When will it finish?
- When is it unfair to halt the exchange?
Since blockchain technology employs a shared ledger, distributed ledger on a decentralized network, all parties involved can quickly find answers to these questions by researching “blocks” in the “chain.” Transactions on a blockchain platform can be tracked from departure to the destination by all of the transactions on the chain.
How Can Features of Blockchain Support Sustainability Efforts
In spite of huge energy consumption the blockchain technology has features that can support sustainability efforts. For example:
Blockchain can give transparency and traceability in supply chains, allowing consumers to verify the origins and sustainability of products. This can encourage sustainable practices and discourage unethical practices such as deforestation, illegal fishing, or labor exploitation.
Decentralization: Blockchain’s decentralized nature helps to eliminate the need for intermediaries and reduce costs and also to increase efficiency. This can enable more direct and transparent transactions, reducing the environmental impact associated with traditional intermediaries.
Smart Contracts: These are self-executing contracts that run on blockchain which eliminates the requirements for intermediaries and automating processes. This can reduce paperwork to minimize the disputes and streamline operations. It can help to lead to greater sustainability by reducing paper waste by increasing resource utilization.
Tokenization: Blockchain enables tokenization where assets can be represented as digital tokens. This can enable fractional ownership and make the process easier for people who intend to invest in sustainable assets such as renewable energy projects or carbon credits, promoting green investments and supporting sustainability initiatives.
Conclusion
Blockchain technology is a ground-breaking system that guarantees safe, open, and unchangeable transactions in a variety of sectors. It functions by utilizing cryptographic methods, decentralizing data storage, and producing immutable ledgers. There are several uses for this technology, including supply chain management and cryptocurrency. Comprehensive training is available for people who want to use blockchain in their jobs with Simplilearn’s Full Stack Java Developer certification. This curriculum gives you the fundamental knowledge of web development and blockchain technologies you need to create creative solutions in the rapidly changing IT industry.
In this blockchain program, you will learn how to master blockchain concepts, techniques, and tools like Truffle, Hyperledger, and Ethereum to build blockchain applications and networks.
FAQs
1. What is Blockchain in Simple Terms?
Blockchain is a shareable ledger that records transactions and is difficult to modify or change. It also tracks tangible and intangible assets such as cash or a house.
2. How Many Blockchains Are There?
There are 4 types of blockchain networks currently – public blockchains, private blockchains, consortium blockchains, and hybrid blockchains.
3. What’s the Difference Between a Private Blockchain and a Public Blockchain?
Private blockchains are only open to selected people, while public blockchain is open to the general masses. Private blockchains are more secure compared to public ones.
4. What is a Blockchain Platform?
A Blockchain Platform is any platform that exists to support or facilitate Blockchains. There are many types of blockchain platforms for different needs, such as Ethereum, Hyperledger, etc.
5. Who Invented Blockchain?
Blockchain was created by unknown persons under the pseudonym Satoshi Nakamoto when they designed the online currency, Bitcoin.
6. What is Blockchain used for?
While most popularly used for digital currency such as Bitcoin, Blockchain is also now used in different sectors to safeguard records.
7. What are the 3 Pillars of Blockchain Technology?
Decentralization, Transparency, and Immutability are the 3 main pillars of blockchain technology.
8. Who Controls the Blockchain?
In blockchain, the power is divided between all of the users operating on the network. No single user has any control.
9. Why is Blockchain Important?
Blockchain offers security, transparency, and trust between the entire network of users. It also offers cost saving and efficient methods for data recording and sharing.
News
Blockchain Technology Will Transform Water Access and Management Globally

Disclosure: The views and opinions expressed here are solely those of the author and do not represent the views and opinions of the crypto.news editorial team.
Access to clean water is a basic human need, yet billions of people around the world still struggle to get it. According to the World Health Organization, over 2 billion people live in countries suffering from severe water stress, and this number is expected to continue to grow due to climate change and population growth.
Traditional water management systems have struggled to address these challenges, often hampered by inefficiencies, lack of transparency, and misallocation of resources. Blockchain technology offers a promising solution to these challenges, providing equitable access and sustainable use of this crucial resource.
The current state of water management
Water management today faces several pressing issues. Inefficiencies in water supply, distribution, and use, coupled with a lack of real-time monitoring, often result in resource waste and misallocation. Many water sources fail to realize their full potential due to infrastructure and financing shortfalls. For example, the Environmental Protection Agency (EPA) report indicated that the United States would need to invest $625 billion over the next 20 years to repair, maintain and improve the country’s drinking water infrastructure due to aging pipes and other infrastructure problems. Additionally, in the United States alone, household leaks can to waste nearly 900 billion gallons of water per year nationwide. This is equivalent to the annual domestic water consumption of nearly 11 million homes.
Furthermore, corruption and mismanagement of water resources can cause unequal distribution, with disadvantaged communities often bearing the brunt of water scarcity. For example, South Africa is struggling with myriad challenges to its water security: drought, inadequate water conservation measures, outdated infrastructure, and unequal access to water resources. The country faces significant water scarcity, with demand expected to outstrip supply by 2030, creating a projected gap of 17%.
Furthermore, the global water industry is highly monopolized, with a few key players controlling a significant share of the market. These companies exert substantial influence over the water supply chain, often prioritizing profit over equitable distribution and environmental responsibility. This concentration of power can lead to inflated prices and limited access for vulnerable populations. The global bottled water market alone is projected to reach $509.18 billion by 2030, with these large companies capturing a significant share of revenue. This monopolization exacerbates existing inequalities in water access and highlights the need for more decentralized and community-driven water management solutions.
Source: Grand View Search
The potential of blockchain in water management
Blockchain technology can address these issues by providing a transparent, secure, and decentralized platform for water resource management. This approach offers several advantages:
- Transparency and accountability. Blockchain’s immutable ledger ensures that all transactions and data entries are transparent and cannot be changed once recorded. This transparency can reduce corruption and ensure that water resources are allocated fairly and efficiently. For example, blockchain can be used to track water usage from source to end user, providing a clear record of how water is distributed and used. This level of transparency can help hold authorities accountable and manage water resources sustainably.
- Efficient resource management. Blockchain can facilitate the creation of smart contracts, which are self-executing contracts with the terms of the agreement written directly into the code. These contracts can automate water distribution based on real-time data, directing water to where it is needed most. For example, smart contracts could be used to manage urban water supply systems, automatically adjusting water distribution based on real-time consumption patterns and demand. This can help optimize water use, reduce waste, and ensure that households and businesses receive the right amount of water at the right time.
In Dubai, the Dubai Electricity and Water Authority (DEWA) has implemented a blockchain-based smart water network initiative as part of its broader smart city strategy. This project integrates blockchain technology with IoT sensors to monitor water usage in real time, manage distribution, and detect leaks. The decentralized ledger ensures data integrity and transparency, enabling more efficient water management and reduced waste. DEWA’s initiative aims to improve sustainability and resource management in the rapidly growing city, highlighting the potential of blockchain to support urban water management and conservation efforts.
Community participation and ownership
Through blockchain, individuals can directly control and monetize their access to water resources, eliminating the need for third-party intermediaries. This direct control model allows local communities to make collective and transparent decisions about their water use. By managing their water directly from the source, communities can tailor water management practices to their specific needs, promoting equitable distribution and encouraging a sense of accountability and stewardship.
Additionally, future models could allow people to monetize their access to water through web3 technologies. For example, a community-to-business (C2B) model could allow people to sell water directly to companies. In this model, people do not have to own the water directly, but can profit by staking their tokens during event sales pools. This approach not only supports sustainable water management, but also creates economic opportunities for community members. Additionally, a “Burn to Secure” protocol can be used to provide water allocation rights. This protocol provides a true sense of water security and financial opportunity by allowing people to redeem their rights. This system not only secures future water allocations, but also increases token scarcity and value.
Additionally, a pure sense of investment is achieved through investments in water sources. This leads to potential financial returns and dividends by addressing the inefficiencies in water supply mentioned above. By investing to finance infrastructure projects, such as building factories and improving distribution systems, more water can be brought to communities, creating additional economic opportunities.
Monetizing water access through the C2B model, the “Burn to Secure” protocol, and investments in water sources all generate economic benefits for the community, promoting a more equitable and efficient water management system.
Overcoming challenges
While blockchain technology has the potential to improve water management, there are challenges to its adoption. The complexity of blockchain systems and the need for technological infrastructure can be barriers, especially in developing regions. Additionally, there are concerns about the significant energy consumption of blockchain networks. However, technological advances and the development of more energy-efficient blockchain solutions are helping to alleviate these concerns. Additionally, education and capacity building are key to ensuring stakeholders understand how to effectively use blockchain technology. Governments, NGOs, and private sector partners need to work together to provide training and support to communities and water management authorities.
Blockchain technology offers a practical and effective means to improve water management. In addition to addressing inefficiencies, blockchain empowers communities, promotes sustainable practices, and opens up new economic opportunities through models like community-to-business (C2B). As we face the growing challenges of climate change and population growth, blockchain is not only an innovative solution, but represents a fundamental shift in the way we manage and value water resources. Adopting blockchain in water management is essential to creating a sustainable and equitable future by changing the way we interact with and protect our most vital resource.
Jean-Hugues Gavarini
Jean-Hugues Gavarini is the CEO and co-founder of LAKE (LAK3), a real-world asset company leveraging blockchain technology to decentralize access to the global water economy. LAKE aims to ensure access to clean water for all, protect water resources, and deliver water to those in need through innovative technologies. Jean-Hugues has a diverse career spanning the luxury, fashion, and footwear industries. His career path includes notable successes at Mellow Yellow, Cremieux, and Tod’s. Raised between Silicon Valley and the French Alps, Jean-Hugues has always been immersed in technology and freshwater resources. In 2018, Jean became the CEO of Lanikea Waters, a water solutions entity based in the French Alps. In 2019, the concept of LAKE was born, embodying his commitment to innovation and sustainability.
News
Blockchain and AI Expo 2024

With rapid advances in the world of AI and blockchain, there are opportunities to leverage the security and transparency features of blockchain to improve the reliability and trust of AI systems and data transactions.
Explore the synergy of these advanced technologies in virtual mode Blockchain and AI Expowhich takes place on October 31, 2024 TO 10:00 GMT.
The event features cutting-edge presentations led by leading experts in evolving fields. Presentations are set to explore opportunities and challenges in the fusion of blockchain and AI, real-world applications, ethics, innovations in environmental sustainability, and more!
Gain a comprehensive understanding of how these technologies can synergistically drive innovation, optimize operations, and promote strategic growth opportunities. Develop your knowledge to facilitate informed decision making and give your company a competitive edge in the growing technology landscape.
News
Nigeria Eyes National Blockchain Nigerium for Data Sovereignty

Nigeria is keeping an eye on a new native blockchain network to protect the country’s data sovereignty.
According to local media, a team from the University of Hertfordshire has proposed the new blockchain, Nigeriato the National Information Technology Development Agency (NITDA).
Chanu Kuppuswamy, who leads the team, argued that relying on blockchain networks whose developers are located in other regions poses national security risks to the Nigerian government. He further said that Nigerium would allow the West African nation to customize the network to meet specific needs, while also promoting data sovereignty.
In his presentation, Chanu cited the recent migration of Ethereum to test of participation (PoS) consensus as an instance in which no Nigerians were involved but whose impact is far-reaching.
“Developing an indigenous blockchain like Nigerium is a significant step towards achieving data sovereignty and promoting trust in digital transactions in Nigeria,” he said.
While receiving the proposals in Abuja, NITDA’s Kashifu Abdullahi acknowledged the benefits a local blockchain would bring to Nigeria, including increased security of citizens’ data.
However, a NITDA spokesperson later clarified that Nigerium is still at the proposal stage and that the government has not yet decided whether to proceed or not.
“The committee is still discussing the possibility with stakeholders. Even if a decision is finally made, there is no guarantee that the name will be Nigerium,” the spokesperson told the media.
Nigerium’s reception in the country has been mixed. Some, like financial analyst Olumide Adesina, To say the network is “dead on arrival”. He believes the Nigerian government’s poor record in following through on its big technology plans will claim another victim. He pointed to the eNaira as a missed opportunity whose chances of success were much higher than those of Nigerium.
Others welcomed the proposal. Chimezie Chuta, who chairs the renewed The Nigerian Blockchain Policy Committee is “extremely optimistic“that Nigerium will be more successful than eNaira.
Speaking to a local news agency, Chuta stressed that eNaira failed because the central bank initiated the project on its own, without involving any stakeholders.
“They just cooked it and expected everyone to like it. [With Nigerium]there will be a lot of collaboration,” he said.
Registration of property title, digital identity and Certificate Verification are among the use cases that Nigerium is expected to initially target. However, Nigeria has already made progress in some of these fields through public blockchains.
SPPG, a leading school in governance and politics, announced in May the country’s first blockchain certificate verification system. Built on the The BSV BlockchainIt was developed in collaboration with the blockchain data recording company VX Technologies and local lender Sterling Bank.
Watch: The Future Has Already Arrived in Nigeria
Italian: https://www.youtube.com/watch?v=M40GXUUauLU width=”560″ height=”315″ frameborder=”0″ allowfullscreen=”allowfullscreen”>
New to blockchain? Check out CoinGeek Blockchain for Beginners section, the definitive guide to learn more about blockchain technology.
News
Cambodian CBDC Developer to Build Palau Bond Market on Blockchain: Report

A Japanese fintech developer will build a blockchain-based bond market gateway for Palau, aiming to launch a trial in 2024 and a full launch the following year.
Japanese fintech developer Suramitsubest known for developing a central bank digital currency (CBDC) for Cambodia, is intended to build a Blockchain-gateway to the bond market based on the Pacific island nation of Palau, Nikkei He learned.
Soramitsu won the contract and plans to introduce the market on a trial basis in fiscal 2024, with a full launch scheduled for the following year, allowing the Palauan government to issue bonds to individual investors and efficiently manage principal and interest payments, according to the report.
The total cost of the project is estimated at several hundred million yen ($1.2 million to $5.6 million), less than half the cost of a non-blockchain alternative, people familiar with the matter said. The project has reportedly received support from Japan’s Ministry of Economy, Trade and Industry, with Japan’s foreign and finance ministries providing strategic and management advice on the project.
Soramitsu’s successful development of Cambodia’s CBDC in 2020 has boosted its reputation, with the digital currency’s popularity soaring, with over 10 million accounts opened by December 2023, representing 60% of Cambodia’s population. Following this, Cambodia’s central bank governor Chea Serey indicated intends to expand the reach of its CBDC internationally, particularly through collaboration with UnionPay International, the Chinese card payment service, and other global partners.
While Soramitsu’s work in Cambodia has been well received, the long-term popularity of CBDCs remains to be seen. As of late June, crypto.news reported a sharp drop in activity in India’s digital currency, the e-rupee, after local banks stopped artificially inflating its values.
According to people familiar with the matter, the Reserve Bank of India managed to hit the 1 million retail transaction milestone last December only after the metrics were artificially infiltrated by local banks, which offered incentives to retail users and paid a portion of the bank’s employees’ salaries using the digital currency.
-
News1 year ago
“Captain Tsubasa – RIVALS” launches on Oasys Blockchain
-
Ethereum1 year ago
Comment deux frères auraient dérobé 25 millions de dollars lors d’un braquage d’Ethereum de 12 secondes • The Register
-
News1 year ago
Solana ranks the fastest blockchain in the world, surpassing Ethereum, Polygon ⋆ ZyCrypto
-
Videos1 year ago
Historic steps for US cryptocurrencies! With a shocking majority vote!🚨
-
Videos1 year ago
Is Emorya the next gem💎 of this Bitcoin bull run?
-
News1 year ago
Solana Surpasses Ethereum and Polygon as the Fastest Blockchain ⋆ ZyCrypto
-
Videos1 year ago
Nexus Chain – Ethereum L2 with the GREATEST Potential?
-
Ethereum1 year ago
Scaling Ethereum with L2s damaged its Tokenomics. Is it possible to repair it?
-
News1 year ago
Fnality, HQLAᵡ aims to launch blockchain intraday repositories this year – Ledger Insights
-
Regulation1 year ago
Financial Intelligence Unit imposes ₹18.82 crore fine on cryptocurrency exchange Binance for violating anti-money laundering norms
-
Bitcoin1 year ago
Bitcoin Drops to $60K, Threatening to Derail Prices of Ether, Solana, XRP, Dogecoin, and Shiba Inu ⋆ ZyCrypto
-
News1 year ago
SendBlocks Debuts with Major Support to Improve Blockchain Data Management