Byjus Logo

What is Blockchain Technology?

Team StoryWeavers|May 03, 2022, 07:28 IST|

 

Image of illustration of blockchain technology in blue, with the text "Why blockchain technology is the future"

Imagine a huge ledger or a record book where you could make an infinite number of records of all kinds of information — numbers, letters, images, things you’ve lent to others, the money you’ve saved up, your Amazon wishlist. Now imagine this ledger was in the digital space, where other people could also access it and record their things, and nobody could change what you wrote where all your secrets would be safe.

That, dear readers, is the basic idea behind blockchain.

You may have heard of ‘blockchain’, when adults are talking about ‘cryptocurrency’ or some news article is talking about the newly advanced technology. Have you ever wondered what blockchain is and how it works?

The evolution of computers and technology has made many thing possible in todays world. Let’s dive into this very complicated and constantly developing topic of blockchain and see what we can find out.

The basics of blockchain

Here’s the scenario: You want a puppy. But your family says no because they think you’re not ready for such a big responsibility. But you know you are. So you decide to ask the only other person who can get you a puppy — Santa Claus! So you sit down and write out a letter to the North Pole, asking for a puppy. Now, you realise you can’t walk to the post office yourself so you ask your parent to post it for you, since they’re going there anyway.

Unfortunately, your parent opens your letter and reads what you’ve asked for. They decide it just won’t do and change it to a bicycle. So, what do you get on Christmas Day? A bicycle.

You figure out what has happened and want to make sure that this time your letter isn’t opened or changed. You turn to the blockchain, which is essentially a network of computers like the internet. This network has everyone — Santa Claus, the elves, and even your family. You upload your letter to Santa, asking for a dog. This letter is then copied multiple times to everyone on the network, so everybody can see that you’ve asked for a dog. This network has other letters to Santa, too, from other children, and you can access all their letters. As an added benefit, all the letters are anonymous, meaning nobody can tell who has written which letter.

Now, your parent sees a letter asking for a dog on the blockchain and realises that it may be you. So they quickly change the dog to a board game. But this time, their change is caught. Because everyone else’s copy of your letter still says dog. So, Santa sees this change and knows something is wrong and bans your parent from the blockchain! And this Christmas, you open your door to see what you’ve been wanting for so long — a dog!

Real-world applications

The real-world version of the North Pole blockchain involves a similar network of computers, all of which upload and contain lists of records or data. This data is split into blocks that are connected to each other and make sense as a data set. Hence, the term, blockchain.

Blockchain technology was first thought of in the late 80s by cryptographer David Chaum. But it wasn’t actually created until 2008, when an unknown person or group of persons, only known to the world as ‘Satoshi Nakamoto’ implemented the first blockchain in the form of Bitcoin. They, till date, hide their identity for security reasons.

Blockchain technology has many real-world applications, some of which we’re still discovering, as it is an unmonitored digital space. This means no government or law enforcement or regulatory body controls this space. It can be used for transferring money like cryptocurrency. Cryptocurrency is a digital currency, very much like paper notes and metal coins in your purse, but completely digital in nature. There are different types of cryptocurrency, like Bitcoin, Ether, Litecoin and so on.

Blockchain can also be used to store any kind of data in a fool-proof manner so that nobody can edit or steal it. This data can be anything from government documents to voter lists to health insurance to even playing video games.

Now you know the basics of what blockchain is and how it can be used. What do you think we can do with such technology? Let us know in the comments below.

Read more interesting articles in Knowledge Vine: 

How Technology is Changing The Way We See

About the Author


Madhavi is passionate about everything to do with books, art, literature, films, trivia and food. A former journalist, she believes that asking questions makes life interesting.

Leave a Comment


*

Testimonials

Join 100+MN Registered BYJUS Users

Book Your Free Class Now

Thank you!

Your details have been submitted
successfully.