The blockchain is believed to be one of the most elusive technologies that are difficult to grasp by a majority of the people. But this concept is actually quite simple and straightforward after a person gets a hang of the theory and architecture relating to basic crypto economics.
Before understanding the principles of the concept of blockchain technology, it is necessary to understand the meaning of the term in layman’s language. The blockchain can be described as the shared and distributed ledger that simplifies the process of recording transactions and tracking the organizational assets in the specific business network.
One of the most common uses of this concept is the storage of bitcoin transactions. This technology eliminates the possibility of effort duplication and it even minimizes the need for intermediaries. It is like Blockchain explained for dummies by using simple and easy language.
Main characteristics of the blockchain network
The main components that are present in the blockchain network include consensus, provenance, immutability and finality. The consensus from all the participants is necessary to make a transaction valid. The provenance makes sure that the participants know the exact source of an asset and the change of its ownership over time.
The “immutability” component makes sure that no one can tamper with a transaction after it has been recorded in the ledger. The finality ensures that a single shared ledger will contain all the details starting from the ownership of the asset to the very completion of the specific transaction. Here the “Blockchain explained for dummies” model has been used so that the technology can be explained in the simplest manner.
Chief benefits of blockchain for businesses
It is necessary to recognize the core benefits of blockchain for business undertakings so that this technological concept can be used to strengthen the business operations. This model acts as a time saving technological concept that records complex business transactions in a fast and efficient manner. The blockchain network is a cost-effective technique that helps a business entity to minimize its expenses by removing the chances of duplication of efforts, elimination of intermediaries, etc.
This technology-based model even tightens the security and protects against unauthorized tampering and fraud. Some of the other benefits of blockchain for businesses include better privacy, upgraded auditability and better operational efficiency. The core benefits of technology have been highlighted here in layman’s language.
Why the technology is called “Blockchain”?
Since this technology stores the transaction data in different blocks that are connected to one another in a form of the chain, it is called as the blockchain. The rise in the transactions leads to the increase in the size of the blockchain. This model basically serves as an important database that is used for recording transactions.
Its major benefits extend much beyond the old and traditional database models. The shared ledgers that are used in the business setting help to revolutionize the business network and improve the storage process. The “Blockchain explained for dummies” framework has been used to cover this technology in the easiest manner.