Gone are the days when the money could make anything happen and someone could have a behind-the-curtain deal to accomplish just about anything. The arrival of the Blockchain technology bears testament to that. With Blockchain, the start of a transparent and clean system has begun. But the burning question on everyone’s mind is “How does it Work?” The blockchain is quite a new technology for most people. Initially developed for the purpose of tracking the movement of cryptocurrency, Blockchain has surpassed the expectation, it has evolved.
There are a few basic questions that Blockchain was initially designed to answer, these where,
- If you want to transfer some fund to someone, then it had to go through a middleman. The middleman would surely take a bite out of it as a commission. Was there a way to get rid of this?
- The transfer of funds over long distance used to take considerable time. Was there a way to optimize this problem?
- If you are part of a system, then why should you be able to know about the inner workings of it? The awareness is after all necessary for safety and purity of the system. There needed to a way to remove this lack of transparency.
- Should the data or money or record get attacked on one node in the system, there must be another record, which should be up to date, so as to get the system back to its feet in no time.
These problems needed a fast solution. Blockchain is the embodiment of that much-needed solution.
But how does it work? if there are a certain number of clients in the network, then each client gets a ledger of sorts which contains the record of activity of each and every client in the system. This ledger is regularly updated. In effect, this means that whatever may happen in the system, everyone would be aware of it. The system would be difficult to attack because the data is decentralized. Everyone has a copy of the records and it is very difficult to attack each and every client or node. This would also grant the system a much needed and valued transparency.
But what about the middleman problem? Well, if anyone wants to send a data to someone else on the system, then the sender can do that directly. Now starts the fun part. This record is new and not on the system. Special clients or nodes called miners wait for new records like this. The first one to get their hands on this record and update the ledger wins. The miner who does that gets a reward. But the fun part is that this reward is not considerable as the pay that the middleman used to cut.
You now have a system that gives you an open-ledger meant for transparency and if you transfer any funds, there is no third party to be paid, you do it directly. A clean and efficient system.