4 Essential Blockchain Technology Concepts You Need to Know – 2023 Guide
Most people that the term Blockchain is only related to cryptocurrencies and various processes linked to trading, mining, and storing Bitcoin, Ethereum, XRP, and many other digital currencies. While this technology was made to serve as a method for the creation and distribution of digital assets, there are also many other uses available. The blockchain is under constant development, and many companies became interested in the implementation of this service into their systems. Therefore, the potential use of blockchain is much wider than just for setting advanced trading systems.
The person who created the first blockchain system is the same one that created Bitcoin. The main purpose of it was to create a way to bypass the standard banking and monetary systems for money transfers and the introduction of new, virtual currencies. On the other hand, with its main feature of using multiple computers and servers for its databases, it can be beneficial for many other sectors as well, especially healthcare, tourism, automotive industry, and more. That is the main reason why a lot of big corporations are interested in this technology. You can visit neconnected.co.uk to read more about big companies that are investing in Bitcoin and blockchain technology. Furthermore, we are going to introduce you to essential blockchain technology concepts that everyone should know.
1. Blockchain is Not a part of Bitcoin
It is not such a surprise that some people think that blockchain is only a service used for the transactions of Bitcoin. The main reason for that is the rapid rise in popularity of Bitcoin in recent years, where people got interested in investing in this cryptocurrency even if they are not familiar with digital currencies or advanced transaction systems. Bitcoin represents the first digital currency based on this type of platform. However, every other cryptocurrency has its blockchain system as well. Moreover, Bitcoin has one of the most advanced platforms where each transfer is recorded, and there is no ability to edit or delete any data.
2. Everything You Store on a Blockchain is Public
This concept is not completely true because you can choose between three types of this system, public, private, and consortium. When it comes to public blockchains, everyone can become a member of this network and use it for sharing and reading various information. You will need to install special software to get access to a particular blockchain system. The main advantage is that this system is decentralized, and each member can use all files and data shared on it. One of the most popular public platforms is related to direct transactions of cryptocurrencies, which allows people to transfer or convert currencies without the need to use bank accounts.
On the other side, a lot of companies are interested in private blockchain systems where they can easily store files and create transactions inside of the company. The advantage is that each person will need your permission to access the database. Moreover, there is also a consortium blockchain, which represents a combination of the first two. For example, a few companies could collaborate on some projects and create a consortium blockchain with shared ownership and control over the members. Nevertheless, you should know that some data will remain private, even on a public network. For example, other participants on the same service will need special approval to see details of your transactions. Also, if some business is using this network to contact their suppliers, all of the data will be visible only to those two sides.
3. There are Multiple Blockchain Networks
It is a common misconception where people thinks that blockchain is only a term related to the technology for creating and transferring cryptocurrencies. The accurate definition of that term is that represents an advanced system that is using blocks of codes inside of highly secured network where you can share data. Besides the platforms related to cryptocurrencies, others are offering various solutions by using this system, such as Microsoft Azure, IBM, Hyperledger Fabric, and more.
4. Smart Contracts
Smart contracts represent an innovation that will have a great positive effect on all industries in the world. This technology has the potential to change the current methods of storing and sharing all kinds of files. Also, many business processes can become much faster with the support of smart contracts. You can use them to share more accurate details of your collaboration with any partner, and it is completely transparent to both sides without any chance for some parts of the contract to be avoided or changed. Also, you will become able to start some projects or complete any transaction much faster and without the need to deal with traditional files and papers. Since smart contracts require a blockchain platform, you won’t need to worry about security as well. This system is much more efficient and can save you a lot of time and money that you waste on traditional business management. Industries like healthcare, banks, real estate, and insurance companies can benefit the most from implementing smart contracts.
Many industries have only recently started to create various analyses and possibilities to implement the platforms encrypted with blocks of codes into their businesses. There are many advantages that various industries can have from using this system, such as improved transparency, much bigger efficiency, advanced security, and traceability. You can use these databases to improve various online services, supply chain management, healthcare, food safety control, fundraising, judicature, voting system, and much more. According to current trends, we expect further development and implementation of this system in the structures of various industries, which can lead to advanced methods that will provide people with advanced business models, much faster transactions, and improved security measures. With the fact that most companies are moving their business on online platforms, this technology will improve the whole system and provide business with fast transactions, better supply of goods, advanced marketing solutions, and improved cost-efficiency with the ability to avoid banking systems and physical documentation.