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Does your Headspin by searching for the term what is blockchain?
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These are the terms you need to know to understand completely about blockchain.
- Centralized
- Decentralized
- Smart contract
- Proof of Work
Having any ideas about the above terms?
Well, Centralized - a central authority to overlook your activities
Decentralized - no central authority to monitor, instead all your activities will be stored in a public distributed ledger
Smart contract- is an agreement embedded in computer code managed by a blockchain. The code contains a set of rules.
Proof of Work - It is a mechanism in blockchain to validate block transactions.
What is Blockchain?
Blockchain is a chain of blocks that contains information, this Blockchain Technology will enable transferring of coins or assets from one individual to another individual without any mediator.
The Blockchain is a decentralized technology, that is without any central Authority, here a global network of computers jointly manage the database.
Yes, the public ledger database that keeps a record of all transaction, hence it is highly secure and here no one can edit or delete the information that stored in the blocks of Blockchain.
How Does it Work?
If a person wants to send a 6$ to another person there may be a transaction fee of 2 $ applied by a central authority like a bank and another person will only receive 4$ - Centralized
Here transaction fee is higher and there is also a high possibility of data tampering as every information is stored in a central server.
If a person wants to send a 6$ to another person there may be a fee of 1 $ applied for mining process and another person will receive 5$, - Decentralized
While coming to the Blockchain decentralized system the transaction fees will be low, their won't be any intermediate and it is impossible to hack any information.
For Example, consider a transaction of a car between 3 people. Initially, person A sold a car to B and the transaction details will be stored in a block called genesis block.
Normally a block consists of
- previous hash(I.e hash of the previous block ),
- data(I.e sender address,receiver address,transaction amount);
- hash(I.e like a unique digital fingerprint)
- nonce(I.e Random value)
If a person B wants to send a car to person c here the transaction verifies proof of work
Proof of work
Here the previous hash of block B matches the hash of block C then this block is added to one after another thus create a blockchain. If it is mismatch then block becomes invalid.
After proof of work verification done the information of the transaction will be shared with all the computers, this is called distributed public ledger.
Advantages
1. Greater transparency
2. Secured and improved traceability.
3. High speed and reduced costs.
Make your transaction highly secured using Blockchain technology.
I think Some What it might be useful to You…
Know More>> Blockchain Development Company
Let us see how Blockchain improves the efficiency in the insurance sector,Understanding ReinsuranceReinsurers are companies that guarantee insurance policies that insurance companies have already sold, also known as the cedent.
In this case, it will avail insurance from another insurer (or reinsurer) to distribute some part of this contract.
This practice enables growing insurers to sustain their revenue generation without risking a financial collapse in case of such a claim.
The retrocession is a process that enables a reinsurance company to participate in the burden of an insurance policy with another reinsurance company.
Not only this, but it can also add a layer of security with cryptography and immutable ledger.Reduced Cost Smart Contracts on Blockchain can be utilized to automate the business operations and reduces the human resource on this process.
Smart contracts are self-executing programs when certain precise conditions are met as described on it.
