Blockchain is actually, a combination of two words – Block (list of digital records) and Chain (cryptography linked together).
This simply means that blockchain is list of digital blocks that are chained together using cryptographic nodes.
In financial industry today, there are a lot of middlemen like – payment processors, banks, and credit cards companies etc. These intermediaries are the institutions that help to establish trust between buyers and sellers, whereby ensuring accurate transactions. They are the reason why cost of transaction becomes costly or cheap depending on speed.
What is Blockchain?
Blockchain simply eliminates the need for middlemen by providing a decentralized, trust-less ledger system with little or no exposure to fraudulent activities.
Although, blockchain is commonly used in connect with bitcoin and altcoin transactions, it is also used by some companies to disrupt huge data, supply of chain to gamblers and the internet.
How does blockchain work?
Nodes – these are large network of computers that runs the blockchain. They validate and keep records of all transactions by solving complex mathematical algorithms.
Every nodes has a complete history of transactions, and that means, no one can change any data without letting the whole systems know – they will definitely reject the change instantly.
Benefits of blockchain
It is very fast because already it has cut out the middlemen that tends to delay most financial transactions, and validation are even inbuilt into the systems.
Blockchain is very cheap compared to what middlemen charge to move finance between financial institutions.
It is secured to the extent that transaction details only remains within the nodes in the networked systems and cannot be seen by humans.