Home World Tech What is Blockchain Technology and How Does It Work?

What is Blockchain Technology and How Does It Work?

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In 2009, our society started entering a new age without anyone realizing it. Not even 12 years later in 2023 are people aware of how much the world is already different, all thanks to a phenomenon with multiple different sides to it. Cryptocurrency and blockchain technology needed each other to become relevant, and this finally happened when Bitcoin appeared and took the world by storm.

Despite the idea for both existing years before they entered the picture, they needed each other to enter the scene and carve their place in the collective consciousness of humans. In the 21st century, the year 2023, most people have heard of cryptocurrency. They know how more can be obtained, how they can be used, and that they are valuable. However, this cannot be said for the system that keeps the cryptos alive, which is of course the blockchain technology.

This really does need to change if we are to collectively move to a brand new, better model of the economy, finance, and business. In order for that to happen, more people have to be familiar with what blockchain technology is and how it works. In this article, we talk about this important topic in order to help people understand its importance. If you want to find out additional info on the matter, make sure to visit oschain.io.

What is Blockchain Technology?

Technology advances so quickly that 12 years is practically an eternity. However, if you think that blockchain only dates back to 2009, you are wrong. The first ideas started floating around much sooner and the initial proposal took place as early as 1991. Things really started to take shape in 2009 because of Bitcoin’s success. So what is blockchain technology, we hear you ask? Well, a blockchain can be (and usually is) described as a digital ledger. It can also be said that it functions as a distributed database shared by a computer network. It serves to store information in a digital format after which any user can browse it and add new info to it.

At the core of every major cryptocurrency lies a blockchain system characterized by its decentralized nature and private, secure transaction records. Everything is far more transparent than what we get with traditional (fiat) currencies controlled by the governments and national banks. To understand blockchain means understanding its ideas, features, and benefits. Therefore, the following sections go through them so that you can better get the hang of why blockchain is so important for the world.

1. Higher Accuracy and Optimal Processing

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With blockchain systems, there are fewer human workers involved with the processes that deal with authentication, verification, and processing of information. The lack of human involvement in these processes can only be a good thing. There are systems in traditional models of various systems that rely too heavily on people doing their job correctly, which does not work and which can be improved upon. Inaccurate verification and poorly processed info cause numerous issues across the board and the solution would be quite simple. Blockchain can easily deal with this if implemented the right way.

2. A Reduction of Costs and Fees

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The bane of the modern society that has its roots in the original model introduced decades ago are fees and hidden costs of the usual everyday transactions and services. The costliest aspect of our (severely) outdated economy model is the very same fees that we have grown accustomed to paying without question to various third parties that control the markets. If you think about it, there is almost always a small, seemingly insignificant fee at every corner, from transferring your own money to buying things. Organizations and institutions involved in this make they’re living out of this by taking cuts and gaining a ton of money on a large scale. Half a dollar may seem insignificant but only when you realize that the bank has thousands of clients in every city. Blockchain does not require third parties and their fees.

3. Decentralization Nature

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In continuation of the whole third party and fee talk, the next important reason why blockchain has proven itself time and time again is its nature of being decentralized. Basically, this means that there is no center of power that holds the grip over the entire system. Right now, the systems in place across the globe are controlled by governments, banks, and conglomerate tech giants. With blockchain, it is the users who have and share the power equally, all in favor of a better platform or system that everyone benefits from and nobody abuses and gets rich from. Less corruption and a fair chance to anyone who wants to be a part of it all.

4. Fast, Secure, and Private Transactions

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It is really about the benefits of every single transaction when we talk about blockchain technology. The leading reason why so many users believe in its future is the fact that the overall quality of transactions is higher. Our current transaction model regardless of what it is implies a huge lack of privacy and security, as well as efficiency. Blockchain transactions are much more secure and actually irreversible once the two sides agree on them and complete them. They are also so private in fact that they are basically anonymous. The need for your entire personal and financial information for every single transaction is completely gone.

5. Better and More Optimal Transparency

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Finally, we need to mention one more benefit of blockchain tech and that is its amazing transparency that benefits all. And when we say all, we mean the people who are working on it and relying on it for the advancement of tech and society as a whole, not those looking to use it for personal gain. Modern blockchain software is based on open-source models, meaning anyone can see the code that was used to develop it and use it for further development.

Anything that exists on the blockchain platform could be checked and improved upon, from security to efficiency. Cryptos, apps, and novelty investment opportunities like NFTs or GT protocol are being developed all the time and there is no authority that controls it. Therefore, any user can suggest changes or perhaps upgrades to the whole thing. If the rest of the users like and approve, everyone benefits from the new and improved code. It is practically a tech utopia that drives society forward.

Conclusion and Takeaways

To make the long story short and conclude the article, all that is left to be said is that there are hardly enough blockchain technology solutions in the modern world. While they may have started as the infrastructure that supports the creation of new cryptos and the survival of the old, it has a lot of potentials that must not be wasted. From economy and business to healthcare and insurance, blockchain can help the world be a better place where the systems work faster, more secure, at optimal levels, and for everyone involved. Although they are more than a decade old, the future is still bright for this tech and they are just getting started changing the world.