What is Blockchain? Why Is Blockchain Technology Important? How Blockchain Works

what is blockchain why is blockchain technology important how does blockchain work
what is blockchain why is blockchain technology important how does blockchain work

With the rapid increase in the place of technology in our lives, the need for information and data security is also increasing rapidly. This need is much greater, especially in areas such as finance, where personal data is included and many transactions are carried out together. Here, blockchain technology comes into play at this point, aiming to ensure data security and transparency. So what does blockchain mean? What is blockchain technology?

What is Blockchain?

Blockchain, that is, Blockchain, describes the chain structure consisting of blocks. Blockchain provides tracking of encrypted transactions as a distributed database system. Blockchain facilitates processes such as recording transactions and tracking assets in the business network. At the same time, this system can be thought of as a notebook that can be shared and cannot be modified.​ ​

Why Is Blockchain Technology Important?

In order for business processes to operate safely and efficiently, information must be transferred as quickly and accurately as possible. The most basic benefit of Blockchain at this point is that it is a ledger that can only be accessed by network members with permission. Moreover, members who can access the system cannot make any changes to the data. Another feature that makes Blockchain ideal is that it has a structure that can be shared and provides transparent information. This is a reassuring element for the user.

How Blockchain Works

Blockchain does not have a centralized system. Data in the blockchain can be accessed via all computers. In addition to accessing information, it is also possible to transparently access information such as who the transactions made here belong to and when they were made.

Since the transactions made in this technology cannot be changed, a new record is added to the system when a correction is requested. Thus, all details are preserved and all correct and incorrect actions can be observed.

In Blockchain technology, the identity is created in the form of a user identification number recognized by all networks. Thus, instead of using personal information such as user name and surname, all transactions are made with this identification number. Transactions made here are encrypted with mathematical calculations in the user's system, that is, hash functions and recorded on the chain.

Character strings created with hash functions consist of letters and numbers. With the slightest change to be made, a different series is formed.

All transactions are verified by the user and the records become permanent. This shows that this technology is not in a centralized structure. In short, the elements that make blockchain technology important are; It has an anonymous structure, is not a centralized system, and is unbreakable and unhackable.​

What Does Blockchain Technology Do?

Blockchain technology offers data privacy with the ability to securely store the information it contains. In order to change the data contained here, you need to get approval from other blocks. This activates the confirmation mechanism as much as the number of blocks. Thus, the system ensures that the data is safe by preventing any good or malicious action that may come from outside.

What Are the Uses of Blockchain?

Blockchain technology has a structure and function that can be used in many different sectors. Here are the main sectors where this technology is widely used:
  • Public sector,
  • financial sector,
  • Energy sector,
  • Health sector,
  • Supply chain.
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