The word “blockchain” refers to an on-chain ledger network that is organized in chronological order and is linked and secured by cryptographic proofs. Nobody owns this network, which is totally public and can never be manipulated by a centralized authority or hackers. The word “blockchain” means “block is a bunch of data and chain is about peer-to-peer joined distributed computers and this is totally decentralized in nature.
Distributed Ledger Technology
Blockchain technology is widely used in cryptocurrency because the blockchain is tempered proof, in the 1990s when computer scientist Stuart Haber & physicist W. Scott Stornetta applied cryptographic techniques in a chain of blocks as a way to secure digital documents from data tampering.
Even though blockchain technology is older than Bitcoin, it is a key part of most cryptocurrency networks. It is a decentralized, public, and distributed digital ledger that keeps a permanent record (a chain of blocks) of all confirmed transactions.
Blockchain transactions occur within a peer-to-peer network of globally distributed computers which are called nodes. Each node validates the transactions and copies the previous records. This is what makes Bitcoin a decentralized digital currency that can be used anywhere, is tricky to censor and doesn’t need a middleman.
In short, blockchain is a distributed ledger technology (DLT) that is intentionally designed to be highly resistant to modification and fraud (such as double-spending). Today’s world bank is a centralized ledger network controlled by the government that’s why our government can manipulate the money, as a result, our paper currency is inflated which directly affects our purchasing power.
As a database of records, the Bitcoin blockchain can’t be changed or tampered with without a lot of electricity and computing power. This means that the network can enforce the idea of “original” digital documents, making each Bitcoin a very unique form of digital currency that can’t be copied.
Blockchain technology is not only used in cryptocurrency; it could also be used in healthcare, insurance, the supply chain, the Internet of Things (IoT), and so on. Even though it was made to work as a distributed ledger (on decentralized systems), it can also be used on centralized systems to make sure data is correct or to cut costs.