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What is the principle, which blockchain technology is based on?
The blockchain is a decentralized public ledger of all transactions across a peer to peer network. Using this technology, participants can confirm a transaction without the need for a central certifying authority. 6 principles behind this technology and how they can be utilized to change the world in a bigger way are listed below:
Blockchain Principle
- Decentralization
Blockchain is a peer-to-peer network, which distributes power among the different members using the technology. This means no single person or system can ever shut blockchain. It would require many users with serious machining power to run blockchain down, and even they might not be successful. Blockchain is robust and resistant to attacks and fraud due to a distributed power system.
2. Integrity
Trust is intuitive and not forced. It is felt with blockchain technology, which uses a distributed verification system for transactions that do not centralize power. Integrity is felt in the decision rights of blockchain users, the network’s incentive structures, and the way blockchain technology operates.
3. Cryptography
Blockchain has been designed with this core principle to provide a high level of security and authenticity to the user. To ensure tightly knit security & data integrity, it uses the power of cryptography. The Blockchain transaction mechanism is favorable & rewarding for an authentic user at the same time it is very harsh on reckless users. That means the blockchain system is fair for all who behave as good users and reward them appropriately. But if you go about using it with the wrong intent you are not spared and definitely penalized.
4. Security
Blockchain is a distributed network; therefore, there is no one central point of failure and no single person can behave recklessly to damage the entire chain of network. The damage because of any individual hack of the password will limit to that single person itself. With blockchain PKI (Public Key Infrastructure) encryption mechanism your transaction over the network is highly secured until you are a fool to share your private key for which no technology has a solution. So, largely you can trust Blockchain technology to ensure your transactions get completed without being hacked.
5. Inclusive
The Blockchain is inclusive in its approach where everyone is independent to participate without any discrimination in the global economy. The Bitcoin allows all the richest and the poorest to invest in their capacity and become part of this global economy, as the need to have a bank account was totally removed. They can directly decide to transact to whomsoever they want without third party intervention that to paying zero or very little transaction fee.
6. Privacy
Lastly, blockchain establishes a separate virtual identity for its users to protect their privacy both — online and offline. The identity uses a series of numbers much like code that is difficult to profile. Hence, blockchain fosters trust by eliminating the need for any real (or seemingly real) identity. It protects the identity of its users so that they can participate in the digital economy freely and fairly with integrity.
