Blockchain Technology | Science & Technology | Enliven

Blockchain is a digital ledger, which is distributed or shared among the nodes or computer network. Since the emergence of cryptocurrencies, blockchain technology has been accepted by many countries. While in India it is still a matter of debate, BAHAMAS became the first country to institute blockchain as its new banking system.


Why do we need blockchain?

In the current system of transactions, i.e. a third party "Bank" system has a lot of pitfalls in it, which the blockchain successfully eliminated.


These Include ⇒ 


i) Transaction Charges⇒ If you ever made a transaction from your account to another account, you might know that the bank charges a fee on that transaction. Although it's quite small, for big businessmen and MNCs who have to do transactions daily, it cost them a lot.


ii) A Point Mistake ⇒ The banking system has big database storage rooms. It becomes easy to alter or nullify these data. Imagine if someone hacked these databases or somehow the database room catches fire.


iii) Power Distribution ⇒ There is no distribution of power in the current banking system. This is the reason, why it becomes very easy to alter the data by the head of the system.


iv) Rules and Regulations ⇒ There is so much paperwork that goes on when a transaction is made out, especially the big transactions. This banking system act as a third party which sometimes requires so much detailing and implementation of terms and conditions that it has exhausting. Any manual work has a chance of mistakes.


v) Time ⇒ Whenever a transaction is carried out, it is first checked by the bank and after its accent, the transaction is made. This Consumes a lot of time.


The bank is just one of the examples where the power and data are in particular hands, there are lots of examples of this.  


●  How Does Blockchain Technology work?


Blockchain helps in distributing information available to everyone in the form of a digital ledger.

Hence it is also known as Distributed Ledger Technology (DLT)


The transaction is made ⇒ Gets distributed to several

nodes, or peer to peer computers ⇒ The transaction is approved by nodes, by checking the balance ⇒ once the transaction is made legitimate, the system creates a cluster of blocks ⇒ these blocks are then chained together ⇒ transaction complete.

● Blocks ⇒ Every chain of transaction consist of multiple blocks and each block has 3-basic elements :


a) The DATA in the block.

b) A 32 Bit whole number is called the NONCE. It is randomly generated when a Block is created, which creates a hash.

c) The HASH is a 256-bit number connected to the nonce.



● How the blockchain solves current banking problems?

The blockchain is considered the future of banks because ⇒


i) No transaction fee ⇒ As there is no third party involved and the database is available to everybody, there is no transaction fee involved. Whenever a transaction is made from one country to another, the currency change (Rupee to the dollar ) does not take place hence, the value of money remains the same.


ii) Immutable data ⇒ The data is highly secured, and once a blockchain is formed it will take about 200 years to alter the information of a single chain.


iii) Decentralization of power ⇒ As the information is available to everybody, any change in the blockchain will require the permission of most of the nodes.


iv) Transparency ⇒ Every device in the network have a copy of every transaction made.


v) Less workforce and paperwork ⇒ As everything is digitally controlled, the system of smart contracts(Contracts in digital form) is initiated.




● Major Issues of Blockchain Technology ⇒

As every coin has two sides the major issues to blockchain are ⇒


i) Security: The weakest link is that if someone wants to access data he can open the node in it. Recently many fraudulent transactions are found to be carried out.


ii) Scalability: The larger the blockchain, the thousands of copies of the same data is present in different nodes.


iii) Regulations: Decentralization may appear a win-win situation but once a problem occurred there is no power to enforce law and order. Hence, No moderator, leaders, not even a regulatory body.

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