In this second part of the article, we're going to go a little deeper into the technical part. As we said in the previous article, the blockchain is similar and has the function of a large decentralized database. But how does a blockchain differ from a traditional database?
A blockchain database stores data in blocks, and when a block is filled with data, it is connected or “chained” to the previous block.
The chain continues indefinitely, with successive blocks of information added to the previous blocks, while the computers that manage the database continue to operate it.
And because the blockchain accumulates data over time, it keeps a history of that data in the order in which it was irreversibly recorded.
On the other hand, a traditional database can be simply a table that organizes data according to specific attributes and typically doesn’t need to have a timeline and previously recorded data can be changed. But, like a blockchain, a typical database may limit who can access, store and retrieve information from it.
How transparent is the blockchain?
The blockchain aims to record and track the movement of information, in addition to being designed to be highly transparent from the point of view of transactions carried out.
To establish transparency, however, you need a secure, hacker-resistant database. Blockchain technology stores information securely and it also records any changes made to a particular block.
The blockchain allows a “without permission” public ledger to be viewed by computers (or “nodes”) on the network. When accessing the network, you (or anyone else) will be able to see the information that has been recorded, even if the data offers anonymity (or semi-anonymity). Thus, users can see all transactions on a given blockchain over time.
For example, the distributed bitcoin ledger can be publicly verified, even if you cannot directly see who is making a transaction. You can track cryptocurrency transactions over time and see where the money has moved and to which accounts.
However, there are blockchains that are “closed”, meaning that users must be authorized to enter data or carry out transactions. In these blockchains, users can remain completely anonymous and transparency is limited by those who control the database.
So while the blockchain is designed to allow for transparency, there are also issues of who has the ability to see a blockchain, who or what is watched, and who is watching.
The answers to these questions—and the blockchain’s transparency—depend on the purpose and business model chosen.
Why is blockchain technology so popular?
Blockchain has become popular because it can be used in various applications, notably cryptocurrencies, and can offer several benefits:
- Decentralization: A blockchain database can be decentralized and validated by the computers on the network who are allowed to access it. This decentralization allows computers to certify and correct the database if conflicting information is entered into the blockchain.
- Irreversibility: A decentralized blockchain validates information and produces an almost irreversible record of transactions, for example, in bitcoin. Once the bitcoins are moved and the transaction validated, it is permanently recorded.
- Security: Irreversibility leads to security for transactions. Network redundancy means transactions are validated repeatedly. And if the information changes, the blockchain identifies that action.
- Transparency: The blockchain allows transactions in a cryptocurrency, for example, to be displayed in a public ledger, even if accounts that have a certain currency remain anonymous or semi-anonymous.
- Anonymity: Because of the way it validates information, a blockchain can operate without either side of a transaction knowing or validating the transaction.
- Robustness: blockchain can enable many different processes and technologies.
Blockchain can also be used for smart contracts, which are automatically validated and executed when their terms are met, as well as allowing the creation and development of cryptocurrencies, blockchain has the potential to offer much more in terms of tracking and verifying capabilities. a whole range of data.
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