Real life applications of blockchain technology
What Is Blockchain Technology?
Blockchain, sometimes referred to as Distributed Ledger Technology (DLT), makes the history of any digital asset unalterable and transparent through the use of decentralisation and cryptographic hashing.
A blockchain is a type of database. To be able to understand blockchain, you must understand what a database actually is:
A database is a collection of information that is stored electronically on a computer system. Information, or data, in databases is typically structured in table format to allow for easier searching and filtering for specific information.
A simple analogy for understanding blockchain technology is a Google Doc. When we create a document and share it with a group of people, the document is distributed instead of copied or transferred. This creates a decentralised distribution chain that gives everyone access to the document at the same time. No one is locked out awaiting changes from another party, while all modifications to the doc are being recorded in real-time, making changes completely transparent.
Some key points about Blockchain:
- A blockchain is a database that stores encrypted blocks of data then chains them together to form a chronological single-source-of-truth for the data
- Digital assets are distributed instead of copied or transferred, creating an immutable record of an asset
- The asset is decentralised, allowing full real-time access and transparency to the public
- A transparent ledger of changes preserves integrity of the document, which creates trust in the asset.
- Blockchain’s inherent security measures and public ledger make it a prime technology for almost every single sector.
Five Real World Applications Of Blockchain:
1. Smart Contracts :
A smart contract is a computer code that can be built into the blockchain to facilitate, verify, or negotiate a contract agreement. Smart contracts operate under a set of conditions that users agree to. When those conditions are met, the terms of the agreement are automatically carried out.
2. Decentralised Finance (DeFi) :
Decentralised finance — often called DeFi — refers to the shift from traditional, centralised financial systems to peer-to-peer finance enabled by decentralised technologies built on the Ethereum blockchain. From lending and borrowing platforms to stable coins and tokenised BTC, the DeFi ecosystem has launched an expansive network of integrated protocols and financial instruments. Now with over $13 billion worth of value locked in Ethereum smart contracts, decentralised finance has emerged as the most active sector in the blockchain space, with a wide range of use cases for individuals, developers, and institutions.
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