WHAT IS BLOCKCHAIN?
Blockchain mainly serves the purpose of a ledger. However, unlike a regular ledger it maintains the transactions of multiple parties at the same platform. All these transactions can be seen in real time by all the involved stakeholders. The blockchain is struggling to decentralize trade without depending on the intermediary on-demand industry and entities. The transparency it provides helps all the users to deal directly with each other without being staying cautious of the trustworthiness of the related parties. It is because of the reason that the transactions are encrypted using cryptography algorithms which make sure that there are no security loopholes that may lead to the loss of users.
HOW DOES BLOCKCHAIN WORKS?
We all are aware of how a ledger looks like and what is it used for? If not, even then it is okay. Let us explain you briefly about it. Ledgers are the sheets that are maintained by the banks to keep track of the transactions of the user accounts. More precisely, a ledger includes the details of the credit, debit, and balance of a particular account.
In case of a blockchain, suppose a rough estimate of six thousand computers updates the ledger sheets of thousands of transactions. The process that figures out how these ledgers are going to be updated is blockchain. However, we are left confused as we are not sure that which is the reliable blockchain platform that we should choose.
Blockchain gets updated every ten minutes with a new block of transactions. The computers that are responsible for updating these blockchains are called ‘miners.’
All these computers are working in parallel to each other as competitors with a common aim of solving a very ‘energy-intensive’ mathematical problem.
The chances for a computer to outperform or win against all the competition lies in the processing power. The more processing power a computer puts in, the higher the chances become for that specific computer to win the competition. This methodology can be simplified by an example of a lottery: it is similar to the case of the lottery in which your chances of winning increase as you buy more tickets.
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In the middle of this competition, when all computers are trying hard to solve this mathematical formula; one of the computers says that it has identified a problem and it is about to add all these blocks of transactions in the ledger of the blockchain. It is when all other computers verify that whether the problem identified is correct or not and all the transactions been suggested are valid or invalid. Once all the networks are done with this reviewing process, a total is calculated that how many machines have agreed to this suggestion devised. If more than 50% of the computers agree, then those blocks of recommendations are included in the blockchain.
WHY CHOOSE BLOCKCHAIN?
The blockchain is the big thing that can evolve the economic trends of the world ultimately. Numerous reasons can easily convince anyone to switch to this technology. Most essential and highlighting among these include:
All the transactions have were done or have to be done are listed on the blockchain platform. These transactions can be seen by all the members that are the part of a specific blockchain platform. With this feature of transparency, the effort required to authenticate and audit the transactions are relaxed. It is due to the fact these transactions are monitored and performed using highly intelligent and complex cryptographic algorithms.
To explain it more clearly with a simple example, let’s consider the scenario of a bank. Whenever a person has to transfer a massive amount of money out of his country: a typical situation is faced, i.e. a bank is not aware of the money unless it has reached the destined bank account. During all this while, a person has to stay upset and keep on asking about his money. It happens because the money has to go through several banks through the way before it finally reaches the prescribed bank. That is the reason why high taxes are deducted from the amount being transferred. In this scenario, if blockchain were the platform all banks were using, then the situation would have been entirely different. All the banks would be present on a single platform and could have contacted each other directly without having to trust each other. A general ledger maintained at an international level would enable a bank to deal with any bank anywhere in the world straight which would also cut down the tax costs.
HOW CAN IT BENEFIT ON-DEMAND INDUSTRIES?
Reduced Charges: When the intermediary stakeholders would be removed from any service supply chain, then the cost would be cut as well, that has to be paid to these middlemen.
Global Market: Blockchain maintains all the relevant marketers on a single platform, from where anybody similar to their background or service can contact them. It is done on an international level, so it enables the stakeholders to get an increased global exposure.
Quick Service: Blockchain enables to perform transactions in the real-time which helps the users to contact and deal with each other instantly.
Equity Administration: Blockchain maintains ledgers of all transactions, which provides transparency into where the equity of a stakeholder resides which helps them manage their part on their own.