Last Updated on December 5, 2022 by cryptocreed
A blockchain is a distributed ledger or database shared amongst computer network nodes. As a database, blockchains store information in an electronic digital format. Blockchains are popular in cryptocurrencies and are used to maintain a secure decentralized record of transactions.
Blockchain technology is what guarantees trust in cryptocurrency records without the need for third-party intervention. Nevertheless, let’s dive deeper into this article to learn more about the features of blockchain technology itself!
How Does Blockchain Work?
The primary goal of a blockchain is to allow digital information to be recorded and distributed but never edited. A blockchain is a foundation or record of transactions that can’t be deleted, altered, or destroyed. For this reason, they call them Distributed Ledger Technology (DLT).
The blockchain concept was initially created in 1991, but it came to be realized once Bitcoin was created back in 2009. Since then, blockchain technology usage has been common in cryptocurrencies, Defi applications (Dapps), non-fungible tokens (NFTs), and smart contracts.
8 Creative features of blockchain technology
Immutability- can’t edit or change it
One of the top features of blockchain technology is immutability. It’s the primary key feature of blockchain technology and shows precisely why its technology is uncorrupted. Therefore, immutability is a term that means nothing can be adjusted or changed. This is the primary reason blockchain technology will always be the way it’s. However, how does it always remain this way?
Blockchain technology differs from the banking system and doesn’t rely on third parties to process transactions. In other words, it processes blockchain features through the collection of nodes.
In-depth, every node within the system has a digital ledger copy. In order for a transaction to be processed, every node needs to have validity. If the majority agrees it’s valid, it’ll be added to the ledger afterward. This way, corruption within the system is almost impossible and transparency is at its highest level.
In short, if the majority don’t agree with the nodes, nobody can add any transaction blocks to the ledger. Moreover, once a transaction block is added to the ledger, nobody can alter or change it. In short, nobody within the network has any power to edit, update, or change it.
It has a decentralized ledger
Blockchain technology is so anonymous to the point where there isn’t any individual or organization that oversees its framework. The network is decentralized because a series of nodes maintain it. Essential features of blockchain technology are beneficial for us so we can immediately access the system and not have to worry about any third party regulating the system.
Decentralized networks offer a higher level of security and a much lower level of failure since they are automated and don’t require any control by third parties, resulting in a much lower chance of error and failure.
Another key feature of the blockchain is that the nodes within the decentralized system distribute each database among several nodes worldwide. This means the blockchain will remain secure even if a computer is breached.
The decentralized nature of a blockchain allows each user to manage data and assets independently. No third party overlooks these assets, enabling them to complete the transaction alone.
Much faster settlement time
Blockchains offer fast settlements compared to centralized networks. This is blockchain technology’s key feature and it has many unique features that make the blockchain much more enjoyable than the rest.
Since a centralized system operates differently from a decentralized one, the settlement time takes much longer. For example, if you make an international payment by bank, it will take a few days to process. However, with the blockchain, this can occur within a few minutes.
This is much better because if you are in a rush and need the transaction to be made quickly, it’s possible with a blockchain but not with a traditional banking system. Let’s take an example with Bitcoin. If you purchase Bitcoin on a platform like Moonpay.com, Binance, or any other online platform, your transaction will be completed immediately compared to a transaction through a bank.
Faster settlements are one of the primary features of a blockchain and to put it short, because no third party is involved, it increases the transactional efficiency and speed. Furthermore, banking takes advantage of using the blockchain.
As of now, when you visit a bank, you verify your ID with each bank you visit. However, a blockchain makes the procedure much easier and faster to track data and transactions.
The blockchain has distributed ledgers
Distributed ledgers give you details about all transactions and parties that are involved. A blockchain’s database is different from the rest and is stored on every network node, which is transparent and open-source.
Public ledgers create the details of a transaction and the participants available to the public. Federated and private ledgers aren’t the same because even though they can be linked to a blockchain system, they don’t have the authority or security required. These public ledgers are what maintain the network’s ledger. Furthermore, anyone who has authorized access is allowed to view the distributed ledger.
Moreover, the top benefit of ledgers is that they are updated continuously, making it almost impossible for anyone to alter them. Regarding them, there isn’t any bias and it’s one of the key features of blockchain technology. Additionally, using distributed ledgers is the same process for everyone. Nobody receives better treatment than the other; it’s the same for everyone when adding blocks.
Each block has a unique hash
Each block has a unique hash within a blockchain and a block before and after. Each block attaches to itself and the previous block within the chain in a blockchain. Each action creates a block and when they combine, they form a chain of data showing you information.
Every time a transaction is performed and the ownership changes, each block will confirm the transaction within the data chain. Therefore, information can’t be deleted or altered and transactions within the blockchain network can’t be reverted after they are blocked together.
Much more secure compared to a centralized system
As no third party is there to overlook your transactions, nobody can edit or change the network’s characteristics. Therefore, if you use encryption, it will add an extra layer of security to your system.
However, what is the level of security offered compared to current techs?
The reason a decentralized system is highly secure is because of cryptography. Cryptography adds a powerful layer of protection for users. Nevertheless, cryptography is another form of firewall for online attackers.
Since all the blocks in a ledger have their unique hash and contain one from the previous block, if you even tried to change the data, it means having to change all the hash IDs and that’s quite impossible to do.
Furthermore, you get granted a public key for conducting transactions and a private key for accessing data.
The consensus is a decision-making process for all group nodes active on the network. Moreover, nodes can quickly agree and much faster than before. However, for the system to run smoothly, you need a consensus that requires millions of nodes to validate a transaction.
All the blockchains worldwide differ and each requires different consensus algorithms. This is because each has its way of making decisions and fixing mistakes. Moreover, for the blockchain to keep the decentralization going, it must have a consensus algorithm, or the overall value will be lost.
Let’s not forget about minting
Minting is the process of recording and authenticating new blocks of data into blockchain technology through “Proof of work.” It’s an essential element within the blockchain and can cause various manipulations and solve them instantly through blockchain technology.
For example, when we look at cryptocurrencies, coins can be minted. That’s how they began in the first place and without minting, cryptocurrencies won’t be alive nowadays. In other words, if you want to mint a currency, mining it is the most effective way to do so.
Miners encrypt information and produce a block of data that contains the number of recent transactions. It serves as evidence that you can use and produce value. For example, if you want to mine Bitcoin, you would need a machine to do so.
Most have high energy consumption, but Ethereum’s blockchain has managed to reduce energy consumption by 99.9% by transitioning from proof-of-work to proof-of-stake.
How have blockchain technology and its features changed the world?
Blockchain technology has completely changed the way transactions are processed. Best of all, it has improved transactional speeds and made it easier for transactions to be processed quickly compared to centralized systems.
Additionally, blockchain technology’s significant advantage is that it can’t be edited, updated, or deleted. This is why many prefer decentralized systems because they are much more challenging to hack into and are better for each individual.
About the author:
Tony Ademi is a freelance SEO content and copywriter. He has been in the writing industry for three years and has managed to write hundreds of SEO-optimized articles. Moreover, he has written articles that have ranked #1 on Google. Tony’s primary concern when writing an article is to do extensive research and ensure that the reader is engaged until the end.