If you are reading the article what is blockchain and how does it work? You have probably heard the name of Bitcoin and other digital currencies such as Shiba and…

All digital currencies use blockchain technology.

In this article, we intend to fully explain the answers and applications to your questions about blockchain technology in simple language.

Blockchain: Introduction

In recent years, many people have sought to buy and sell Bitcoin and use other features of this digital currency.

From beginners and novices to professional traders of the fascinating world of digital currencies, everyone has become very interested in this emerging and remarkable phenomenon of the 21st century.

Despite the ever-increasing number of traders in the digital currency market, few people have read and know enough about the underlying technology of Bitcoin, i.e. Blockchain.

It is even possible that they are unaware of the creation of other digital currencies based on blockchain!

Blockchain: What is it?

In traditional society, we have to use an intermediary such as public and private banks to make a monetary transaction.

However, blockchain allows buyers and sellers (senders and receivers of digital money) to communicate with each other and trade digital currencies directly and without the presence of a third party.

This type of transaction is called a “peer-to-peer” mechanism.

Blockchain technology uses cryptography to increase security in buying and selling digital currency and even exchanges.

Unlike banking systems that operate in a specific, so-called centralized location, the data center where blockchain networks are located is completely decentralized and distributed around the world.

The place where blockchain information is kept is called a “distributed ledger”.

The distributed ledger is accessible to all members present in the network and full detail, and even the smallest changes in transactions are transparently visible to everyone.

This network is a chain of computers that check and confirm the correctness of the transactions between the first user and the second user.

after its confirmation, the transaction information is added to the blockchain.

All data in the blockchain network is entered into the database in a structure consisting of “blocks”.

Each block is formed as a continuation of the previous block and contains information that connects it to the previous block.

Because these blocks are connected with the help of information, it can be said that they form a “chain” in which the blocks are placed together in order of construction.

Blockchain: How it works

The blockchain stores all the data and details of one-by-one transactions made with this cryptocurrency and prevents a user from trading the same bitcoin more than twice (in a way, intending to commit fraud).

In a block, when it stores new information, it’s added to the blockchain.

And in this way, with a chain of several interconnected blocks, the overall title of the blockchain is formed.

Blockchain: why it is important

Blockchain technology and its applications are countless and unique and can be used in almost anything and any industry that is transactional, such as the exchange of money, goods, real estate, or smart contract.

The usage of Blockchain

Blockchain technology has countless uses. As we said, blockchain can be used as any platform where there is a need or record and transfer information or messages.

In this part we are going to introduce some important usage of blockchain:

Making international payments

Transferring money internationally is a hassle with the traditional banking system.

Due to the existence of a complex network of intermediaries, using the traditional banking system is expensive and slow.

Digital currencies and blockchain eliminate these middlemen and provide fast and easy transfers around the world.

Many blockchain projects use this technology to create a platform for cheap and almost instant transactions.

However, some of the main features of blockchain, such as decentralization, are sometimes overlooked.

Gaming industry

The computer game industry is one of the largest entertainment industries in the world that can use blockchain a lot.

In most computer games, users have to accept and implement the rules of game developers and use the platform specified by them.

Users can’t change and develop many of them.

Blockchain can be useful in decentralizing the ownership, management, and maintenance of games.

The usage of blockchain in the Internet of Things

Currently, a large number of physical objects are connected to the Internet and this amount is increasing every day.

The communication and cooperation between these objects can be done noticeably by blockchain.

For example, automated machine-to-machine payments could create a new branch of the economy that requires a secure, high-throughput solution to run.

Blockchain simply can develop the Internet of Things workspace.

Blockchain in Health care system

Safe storage of medical data is important and necessary for any healthcare system.

The treatment system’s reliance on centralized servers puts it in a sensitive and dangerous position.

Security and transparency make blockchain technology the best platform for storing medical data.

Patients can share their medical information with any medical institution while maintaining their privacy by having their medical information encrypted in the blockchain.

Creating Digital ID

Safe management of the identity of people and entities on the Internet requires a quick solution.

Huge amounts of our data are stored on centralized servers.

Artificial intelligence algorithms review this information without our consent.

The decentralized structure of blockchain

So far, the structure of the blockchain has been examined as a database and we have seen that the data in this structure are connected in a chain.

If we look at blockchain as an independent database, then it will only be used in some practical applications.

But we use blockchains as a tool to coordinate different people.

This means that in this system, no one will have the ability to edit data outside the rules of the system.

Therefore, it can be considered that the ledger belongs to everyone at the same time, and for any change in it, the majority must agree.

Conclusion

Blockchain is a new technology that aims to store and transfer any type of data in a decentralized manner.

In this system, nodes are responsible for confirming and registering the transaction.

These nodes are distributed all over the world and use consensus algorithms to perform their tasks correctly.

The security of the blockchain network is the result of using innovative ideas in the field of cryptography and economics.

In this article, in addition to examining all the technical and practical aspects of blockchain.

we tried to explain the applications of blockchain in different fields.

We hope you enjoy this article and we would like to you share your thought with us in the comments.