What is Blockchain and How Does It Work?

Blockchain is a way of storing data digitally that is interconnected between one device and another.
This technological development is currently popular because it is widely used. The use of blockchain itself cannot be separated from cryptocurrency, although in fact there are many other fields that use this technology.
One of the reasons why this technology has many users is because many people consider the system to be more transparent, as well as being able to generate profits.
Are you curious about a complete explanation about blockchain?
Check it out below, OK!

Understanding Blockchain
If you look at the name itself, this blockchain consists of two words, namely block which means group and chain which means chain.
If you look at these two words, the meaning of blockchain is a group that is connected to each other like a chain.
Blockchain itself is a digital data storage technology whose storage media will be connected to each other.
The data stored can vary, depending on your needs.

How Blockchain Works
A brief explanation of how blockchain works is that one device will connect with another device to record and check existing data.
The most frequent and popular use for this technology is in crypto.
For more details, here is the flow and how this blockchain technology works: First, a shop accepts payment via Bitcoin.
Then, along came customers who wanted to buy and pay using Bitcoin.
The shop owner provides his wallet address.
Then the buyer makes payment to that address.
The transaction took place.
This transaction will be sent in the form of a request which will later be sent to the Bitcoin miners' accounts.
Bitcoin miners themselves are people or groups who have special devices to carry out mathematical calculations for each bitcoin transaction.
These are the ones who become part of the block and will form a chain.
The miners will calculate the value of the newly sent Bitcoin based on the existing combination and conversion.
Once the value is obtained, a new block will be created.
This block will later be used as a place to store transaction data between buyers and shop owners.
After that, the transaction will be verified.
And the number of Bitcoins in the shop owner's wallet will increase.

Blockchain Advantages
As an innovation, this technology does have several advantages.
With a system where each block can check each other, the possibility of errors becoming smaller.
Apart from that, several other advantages of this blockchain technology include:

1. More Transparent System
One of the advantages of this technology that makes it so popular is that the system is more transparent. This arises especially in crypto matters. Every transaction that uses blockchain technology can be seen by the general public. The public can freely examine every transaction that occurs. Those who can check are freer because they don't need to have access to log in. Such a system also means that every person's coins cannot be used for any need without the owner's knowledge.
2. Better Protection System
In many existing systems, blockchain is considered to have a more secure system structure. This also makes protection for data stored using blockchain safer. In its application, blockchain technology uses a verification system by miners before the data or transactions enter the next process. Even if you look deeper, the database structure part of this blockchain only has features for adding data and no features for editing. With no edit feature, this means that no one can change the data. So, the potential for hackers to enter is smaller.
3. Better Audit System
If you look at the two previous advantages, this will also result in a much better audit system. This is also one of the advantages of blockchain technology. When everyone can track and see all transaction data, audits can also be carried out more easily. Apart from that, the potential for data loss is also smaller. This is because the database can only add data. The database cannot be deleted and there is no feature to edit or change data.

Blockchain Characteristics
Apart from the issue of superiority, this blockchain also has several characteristics. These characteristics include:
1. It is open source
Blockchain is open source. That means, everyone can get involved in this. As long as he understands the system and the developer, he can be involved in utilizing this technology. Later, this person can also carry out verification, see how much supply there is, see the potential for inflation, and so on.
2. Not Centralized
Blockchain is a distributed, or not centralized, system. So, no one person or institution can control it. This is because the codes used in this technology are not stored on just one server. The code is spread across thousands of devices connected to each other on the blockchain network. In fact, if you want, you can also be part of the application.
3. Clear Inflation Rate
If it is related to the use of this technology for cryptocurrencies, one thing that cannot be avoided is inflation. However, with the use of this technology, data about the inflation rate becomes clearer. This is because you can know clearly how much supply there is, and how much demand. With clear data regarding this matter, the data for inflation will become more accurate.
4. Cannot be deleted
Every transaction that has occurred on the blockchain cannot be canceled or deleted. That's because system-wise, this technology will only be able to add data and cannot delete or make changes to data. This can also reduce the potential for hackers to enter because no data can be taken or changed.

Use of Blockchain
Of all the advantages and benefits provided by this technology, most of its use is for financial purposes, especially cryptocurrency.
The use of this technology is considered much safer and more efficient.
Apart from that, some other uses and uses of this technology include:

1. Speed up and simplify payments.
2. Reduces costs required for admin.
3. Improve the security of data management funds.
4. There is transparent data from every transaction.
5. Longer lasting data.

Those are some of the benefits of using this blockchain technology.
Currently, many people are even involved in using this technology.
Most of them use this technology to become miners or crypto miners.
This technology is quite profitable for many people.
So the applications have become quite numerous and massive.