Blockchain (Part 3)

 What is Blockchain?

Blockchain is a decentralized, distributed ledger technology.

Tat records transactions securely and transparently across a network of computer.

Uses of Blockchain

*Cryptocurrencies (e.g., Bitcoin, Ethereum)

*Smart Contracts (self-executing agreements)

*Supply Chain Management

Identity Verification

*Decentralized Finance (DeFi)

How Blockchain Works

*The block is added to the blockchain through consensus.

*Valid transactions are grouped into a block.

*A transaction is initiated and broadcast to the network.

*The transaction is complete and permanently recorded.

*The network nodes validate the transaction.

Key Features of Blockchain

- Security – Uses cryptographic techniques to ensure data integrity and prevent tampering.

- Decentralization – No single authority controls the data.

- Immutability – Once a block is added, it cannot be changed, ensuring a permanent and reliable transaction history.

- Transparency – Transactions are publicly recorded, making them verifiable by anyone.

- Consensus Mechanisms – Transactions are validated through mechanisms like.

Advantages of Blockchain

- Security – Uses cryptographic techniques, making it highly secure and resistant to hacking.

- Immutability – Once a transaction is recorded, it cannot be altered or deleted, ensuring data integrity.

- Decentralization – No central authority controls the system, reducing the risk of manipulation or failure.

- Smart Contracts – Automates processes through self-executing agreements, reducing the need for manual intervention.

- Transparency – Transactions are publicly recorded, allowing anyone to verify them.

- Financial Inclusion – Enables access to financial services for people without traditional banking.

- Efficiency – Removes intermediaries (e.g., banks, third parties), making transactions faster and cheaper.

Disadvantages of Blockchain

- Energy Consumption – Proof-of-Work (PoW) blockchains (like Bitcoin) require large amounts of electricity.

- Scalability Issues – Processing speed and transaction limits can be slow compared to traditional systems.

- Regulatory Uncertainty – Many governments are still figuring out how to regulate blockchain-based activities.

- High Initial Costs – Developing and integrating blockchain technology can be expensive.

- Privacy Concerns – While transactions are transparent, they may expose too much information in some cases.

- Irreversibility – Once recorded, errors or fraudulent transactions cannot be easily corrected.

- Limited Adoption – Many industries have yet to fully integrate blockchain due to technical and regulatory challenges.

Blockchain & Cryptocurrency

Although blockchain and cryptocurrency are closely related, they are not the same thing.

Performance of them

- Cryptocurrencies use blockchain to record transactions, ensuring transparency and security.

- Blockchain is the underlying technology that enables cryptocurrencies to function.

- Some Blockchain s (like Ethereum) support smart contracts, enabling decentralized applications (DApps) beyond just payments.