The initial concept of Blockchain term for how to structure and share data has now transformed into a modern approach. These distributed databases can store and share data and allows users to use that information for different purposes.
There are various types of blockchain applications that companies are using across hardware and platforms. Some of them are given below:
Types of Blockchains
There are many types of blockchains such as Public blockchains that run through a token and have open-source code. Bitcoin is an example of a public blockchain. Another type is permissioned blockchains which work as large distributed systems and may or may not be open source.
Both public and permissioned blockchains use native tokens. On the other hand, Private Blockchains do not use a token and are smaller in structure. Besides, third-party service providers control their membership through trusted and reliable members who trade confidential information. Another type is Sidechains which run parallel to the main chain to allow the moving of digital assets between two different chains.
All these types of blockchains utilize cryptography for safely managing ledgers. This eliminates the need for central authority which is the most dominant aspect of blockchains. Blockchains create a history of transactions that are difficult to change or remove. If a user wants to make a new transaction via Blockchain, the controller with validation control will first verify the proposed record.
Difference between a Typical Database and a Blockchain
One significant difference between a typical database and a blockchain is the data structure. A blockchain collects information in groups called blocks that contain sets of information. These Blocks have some storage capacity and they are linked to the previously filled block once they are filled.
This data chain is called a blockchain that contains data structure chunks linked together in a chain of blocks. This data structure intrinsically makes an irrevocable timeline of data when applied in a decentralized nature. Whenever a user adds a new block, it gets a precise timestamp.
Blockchains, also known as Distributed Ledger Technology (DLT), can record and distribute digital information without any editing. This makes blockchain the foundation for indisputable ledgers or records of transactions that cannot be changed, erased, or destroyed.
Blockchain allows the data held in a database to expand amongst numerous network nodes at different locations. If anyone tries to modify a record at one occurrence of the database, the other nodes would remain unchanged. This would avert the perpetrator from making any change. Similarly, if one user tampers with a record of transactions, all other nodes would cross-reference each other. As a result, nodes with incorrect information would be instantly identified.
This system helps in establishing a precise and crystal clear order of events. This way, no one node within the network can modify the information it contains.
Uses of Blockchains
Companies like Walmart, Siemens, Pfizer, and Unilever use blockchain to track their products’ supply chains. Financial institutions are also integrating blockchains to exchange funds securely and more quickly.
Moreover, the healthcare industry is also leveraging blockchains to secure the medical records of their patients via private keys. The hospitals can assign these keys to certain individuals for limiting access and warranting privacy. Likewise, real estate agents are keeping the record of property transparent by establishing clear timelines of ownership of property.
Benefits of Blockchain
One of the major benefits of Blockchain is its accuracy. Limited human intervention in blockchain transactions keeps the record accurate. Besides, there are very minimal chances of computational mistakes.
It requires 51% of the network computers to make the same mistake for the error to spread across the blockchain. Hence, it becomes almost impossible for the error. Blockchains also reduce costs by excluding the need for third-party verification and processing fee. Moreover, the decentralized structure makes it the securest form of a database.
Why Startups Should Use Blockchain Technology
Startup businesses can use blockchains to put themselves ahead of their competition. With blockchains, startups can ensure that all their transactions are transparent, safe, and reliable. Startups can use blockchains to improve their business processes with improved accounting systems, seamless data sharing, and eliminating the middleman.
Blockchains can also shorten the supply chain by directly selling to the final consumer. Hence, the technology lowers prices and increases profit margins. Blockchain technology also allows startups to expand their audience and market their products globally without worrying about exchange rates.
Most importantly, blockchain technology also makes it easier for startup companies to raise capital. Startup owners can leverage blockchain to evade many obstacles that slow down the fundraising process.
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