We all intend to plan ahead.
Many of us are aware of the hottest term spreading nowadays in the market with the buzzword “Blockchain”. You may have heard Blockchain is a very complex technology from many people, but don’t worry. We will make sure that you will easily understand the concepts of Blockchain and with little practice, you will be open to excellent career opportunities in the Blockchain domain. So let’s understand what exactly is the Blockchain.
A blockchain is a type of database. The main intention behind the concept of Blockchain was to provide security to the whole ecosystem. In simple words, Blockchain is a kind of database that stores transactional data in a very secured format which makes it impossible to hack. The transactions are stored in the Block format with the help of cryptographic algorithms. The continuous chain of these blocks is called Blockchain. There are many Blockchains available in the market for different kinds of purposes. As the Blockchain is still in its initial stage, a lot more potential of Blockchain is yet to come out. The idea of Blockchain is to cut off the centralization power hence it works on the decentralization concept in which the digital ledger of transactions is maintained in a secured way in a decentralized fashion.
There are two main types of blockchain among which first is Public Blockchain and second is Private Blockchain. Blockchain is a type of Distributed Ledger Technology in which transactions are stored in hash format. Hash is the cryptographic fixed-length output irrespective of any length of the input.
Comparison of traditional banking transactions vs Blockchain transactions :
Being the best trending technology “Blockchain” is disrupting the banking sector as well along with other fields. Many larger banks and companies have started adopting Blockchain solutions for their organizations to make the transactions transparent and more efficient.
Traditional banking transactions are stored in the database servers where the transactions are replicated from one server to another server while the transactions stored in the Blockchain are synchronized that means at the time of updating the ledger majority of the nodes should agree to it.
The majority of traditional banking transactions are stored in the structured form(rows and columns format) without using cryptography, while all the Blockchain transactions are stored in cryptographic format.
In banking transactions, the currency rate changes with respect to the country but the rate of blockchain-based cryptocurrency is universal.
If you want to transfer money from one country to another we have to make use of currency exchange platforms but we can directly transfer the Blockchain-based cryptocurrencies easily without converting them into other currencies. For example, if you want to transfer money from India to the US, you need to convert INR to USD with the help of exchange platforms but you can directly send Bitcoin from India to the US without doing any conversion.
At the time of transferring money internationally, the transaction chargers are more in traditional banking but the transaction fee is very less if we consider Blockchain transactions.
Traditional banking transactions take much time for their completion but the Blockchain transactions are very fast and its algorithm helps to update the universal Blockchain ledger very quickly.
Old banking systems use the centralization concept but the Blockchain-based solutions follow the decentralization approach while storing all cryptographic transactions.
Due to the centralization concept, traditional banks can be hacked but as the Blockchain believes in decentralization it is impossible to hack or make changes in it.
The changes made in the banking systems without blockchain solutions are difficult to analyze but hashing concept used in the blockchain allows us to detect a single change in any transaction which finally changes the whole hash of the block.
NASDAQ OMX Group Inc. is working with blockchains to make the transactions more efficient, effective, transparent. Spain-based Banco Santander is focusing internally to develop blockchain solutions that will reduce their cost by $20 billion per year till 2030.