What is Blockchain Technology – Why is Blockchain Technology Important?

What is Blockchain Technology? You might have probably heard of the term “Blockchain Technology” severally. If you are not familiar with the term, you might even be asking yourself the question stated above.

What is Blockchain Technology
What is Blockchain Technology

Well, blockchain technology is a structure that stores records in such a way that makes them difficult to be accessed, hacked, and manipulated.

When records are stored in a blockchain, the records are stored in blocks that are linked together by cryptography. Are you interested in implementing this technology for your business, read this article to know more about blockchain technology and how it works.

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What is Blockchain Technology

Blockchains are decentralized ledgers. Records are stored in a blockchain and distributed among the networks connected to the chain. It is a distributed ledger technology for recording data in multiple places at the same time. Blockchain technology reduces the risk of invasion and facilitates cybersecurity.

What is Blockchain Technology Cryptocurrency?

Blockchain technology is a ledger of all the transactions across a peer-to-peer network. In the case of currency, blockchain connects all transactions on cryptocurrencies to be stored in chains. In addition to this, blockchain technology allows Bitcoins and other cryptocurrencies to operate without using a central authority.

Blockchains are used in cryptocurrency systems to maintain a secure and decentralized transaction recording. Hence, it reduces extremely reduces the of intruders hacking into the accounts of individuals to access their private information. Furthermore, it also eliminates processing and transaction fees in cryptocurrency.

What is Blockchain Technology in Healthcare?

Blockchain technology is used in healthcare to secure medical information. In healthcare, the privacy of patients is of utmost importance. Blockchain technology helps healthcare providers to store their patients’ medical records securely.

A blockchain example in healthcare is; when the hospital generates and signs the medical result of a person locked in a secure peer-to-peer network. The information can be encoded and stored in a blockchain.

This gives patients the confidence that their medical records are secure and cannot be changed. This is because the medical results will be assessable by certain individuals.

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How Does Blockchain Technology Work?

Blockchain technology store information in digital format. A blockchain collects data together in blocks. These blocks have a certain capacity of information that they can hold. When a block is filled up, it is closely linked to previously filled up blocks forming an irreversible chain.

Blockchain technology consists of cryptographic keys. These are public and private keys that individuals use to generate a secure digital identity. The digital identities produced are then locked together in peer-to-peer networks.

In blockchain technology, information is shared in each node of the peer-to-peer networks. This information is the same across the entire database. If someone tries to manipulate or replicate an entry in one copy of the nodes, the majority will be reflected and access will be denied.

Why is Blockchain Technology Important?

In our present world, blockchain technology is very important. It provides security for data as well as transparency. Additionally, it builds trust between all the users of the peer-to-peer network. It is a very productive method for data recording and sharing.

What is Blockchain Technology Used for?

The use of blockchain technology is numerous. Due to its efficiency when it comes to the security of data, it can be used for:

  • Financial exchange and money transfer
  • Copyright and royalty protection
  • Digital voting
  • Keeping medical records
  • Weapons tracking
  • Monitoring supply chains
  • Tracking prescription drugs

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Types of Blockchain

Organizations make use of blockchain to keep the information of people safe in a secure network. There are different types of blockchains used to store transactions in chains. They are stated below:

Public Blockchain Networks

This type of blockchain technology is available to the public without any restrictions. As long as you have a system that can connect to the internet, you can participate in public blockchain networks. All networks under a public blockchain have access to a block from the blockchain.

With DL T being distributed across several networks, public blockchain networks are used to reduce security challenges. This type of blockchain is frequently used for exchange and cryptocurrencies. The most common public blockchain networks are Bitcoin, Ethereum, and Litecoin.

Private Blockchain Networks

Unlike public blockchain networks, a private blockchain is restricted for use by the public. Hence, it can only be operated in a closed network. Only one organization is allowed to manage a private blockchain network. When this blockchain network is used in an organization, it can only be accessed by selected individuals.

Organizations use a private blockchain to ensure security options, authorization preferences, and accessibility. Common examples of private blockchain networks are Corda, Hyperledger projects, and Multichain.

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Hybrid Blockchain Networks

This type of blockchain network is controlled by a single organization. However, to some extent, it is available to the public. Hence, it is a combination of both public and private blockchain.

This network allows organizations to get the most security from both private and public blockchains. Furthermore, this blockchain improves organization as it permits who can be assigned to the network.

Consortium Blockchain Networks

In this type of blockchain, more than one organization can manage a blockchain network. This simply means that more than one organization can act as a node in the network. This network offers a lot of security for organizations.  Consortium blockchain networks are commonly used by banks and governmental organizations.

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Can Blockchain be Hacked?

Blockchain technology keeps records locked irreversibly in chains. This makes it extremely difficult for hackers to access the records and manipulate the information stored in them. However, in rare cases, there still might be vulnerabilities outside the blockchain with which hackers can gain access to the records stored in the chain.



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