Steemit Crypto Academy S8W1 ||The Importance Of Blockchain Technology

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Greetings to All

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I wish you all will be good in Health and enjoying the days of your life by the grace and mercy of Almighty Allah. I warmly welcome all of you to my participation post for the Steemit Crypto Academy in the first week of the engagement Challenge. There is an important topic that is chosen this time for the contest and the topic is The Importance Of Blockchain Technology. So let's start the discussion without any waste of time.

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Introduction

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Blockchain is a developing technology. It is the immutable public ledger that supports the process of recording transactions and tracking the assets stored in any network. The transactions are stored on the nodes, These nodes are helpful for confirming the transactions and getting the fees in return. Our financial system is developing by gaining this blockchain technology. The world is changed after the evolution of blockchain technology. This technology is used in a wide range of different fields. Almost every field has the step to blockchain technology such as transport, music, finance, and a lot more applications of blockchains in advancing human systems in front of us.

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What are the main issues arising in the existing system of blockchain technology?

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Although blockchain technology is an evolved technology with a lot of benefits and attributes. It is acquiring popularity and technology is improving day by day. With every spectacle and elaboration of new technology, there are some issues also, as I also illustrated earlier that blockchain technology is in the progressing face so it is also important to keep the focus on the issues that we face while implementing the technology so that we will be able to solve these issues and the blockchain technology will move towards more betterment.

Scalibility

The first problem in the execution of blockchain technology is scalability. We know that with the advancement of blockchain technology, more users are entering the technology world and the procedure of transactions is slowing down day by day.

Due to this the rewards fee is also varying especially in the most famous Etherum blockchain. There are a large number of nodes that are used in blockchain technology to hold the data which have limited depository due to the increasing hindrance of the work it is difficult to operate to and store all the information.

Security

Another issue with the current blockchain technology is the security problem. We all are well conscious of the many events of hacker attacks or cyber-attacks. Security is the first priority before the implementation of any technology, So security matters become a hindrance in the implementation of blockchain technology.

As a decentralized technology, no third party provides security responsibility. If the hacker gets access they can get out all the data and tokens of the user.As anyone can use this open-source technology so it decreases its accuracy in it the way that it becomes easy for hackers to steal data.

Compatibility

Blockchain Technology is a network that operates independently which can make the procedure of transmitting the data and network in other networks difficult. This process restricts the process to improve the network. So less compatibility is another issue that is present in blockchain technology.

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Energy Consumption

Another issue we find in the implementation of blockchain technology is the high energy consumption. Blockchain is working on the basis of nodes that stores the data and transactions process a high amount of energy is required to run these nodes.

The mining process of blockchain technology is energy-consuming that has an effect on the energy sources so it is also another issue in the implementation of blockchain technology.

Blockchain is an emerging field and has a lot of benefits in different fields. If the problems related to blockchain technology will be solved it will increase the efficiency and capacity of the technology in different aspects.

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Some Key features of Blockchain Technology

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Although there are some problems in the implementation of blockchain technology its features and benefits are more worthwhile. Blockchain technology is an amazing method for storing and moving data and assets on a decentralized, widely distributed ledger system. It has become increasingly popular as a highly secure, transparent, and unchangeable way of managing and exchanging information. In this question, we will explore the essential characteristics of blockchain technology.

Transperancy

One of the unique features of blockchain technology is its transparency. This indicates that all transactions that take place on the blockchain are publicly available for anyone to view. Since the transactions cannot be changed once they are recorded, this creates a system of trust and accountability, making it easy to track and verify transactions.

We can say that the transparency of blockchain technology is a powerful tool that promotes trust and helps to reduce fraud.

Decentralization

Blockchain is a decentralized technology which means no third party is involved in the transactions. We can easily access our transactions at any time. Instead, many computers operate together to check if a transaction is accurate. When a transaction is made, it is sent to many computers in the network to check if it is okay.

If it is approved then the transaction is added to the blockchain and all the computers in the network update their copy of the blockchain. As no third party is involved this enhances security.

Low Fee

Blockchain technology is efficient because it can process transactions quickly and without the involvement of a third party which can lead to faster transaction times and lower fees. This is possible because the network is decentralized and can handle a large volume of transactions at the same time. This makes blockchain technology more efficient and impressive.

Immutability

When a transaction is added to the blockchain, it cannot be changed or removed. This makes the information on the blockchain very reliable since everyone can be sure that it has not been fiddled with. This also makes the blockchain a safe way to store sensitive data, such as economic or secret data. As the information is permanent, it can provide a historical record of all transactions made on the blockchain.

So these are some key features of blockchain technology that make it a worthy technology.

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Give a basic and simple understanding of how blockchain technology works

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Blockchain Technology is one of the major fields in the world of Technology and Finance. Here I will talk about the working of blockchain Technology. Technology is evolving day by day so it is really necessary to learn about working for the pure concepts that how looks can work.

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There are a lot of components and processes that are involved in the working of blockchain Technology.

Working of Blockchain

As I already discussed that blockchain technology works by the building blocks that store the transactions. These blocks are the main key elements in the working of Technology.

• When the process of transaction is initiated it is firstly verified by the nodes that are present to approve. When the transaction is verified it is added to the new blocks with new and unique codes called hash.

• There are some mechanisms that should be verified before adding the block into the blockchain these mechanisms are Consensus mechanisms such as Proof of work or proof of stake etc this confirmed the contract of all the nodes that the transaction is verified from all network of nodes.

• After passing through the process of verification it is added to the blockchain and becomes permanent that is immutable. New blocks are linked with the previous blogs and make a very large unbroken sequence of the chain that cannot be varied.

• After the addition to the blockchain it is added to the network of nodes that are linked with the copy along to ensure the data security and approval of the transaction that is proceeding.

This process is repeated when further new transactions are initiated. Miners from all over the world process and verify information on the Blockchain, and they get rewarded with cryptocurrency coins for their work. This makes Blockchain a good source of income for those who participate in the process.

The data on a blockchain is very secure because if someone tries to change a block, they would also have to change all the other blocks that came after it. This requires a lot of computing power, which makes it almost impossible for anyone to alter the data. This is why blockchain technology is considered very strong and reliable.

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Provide an understanding of how we can be able to use Zero-knowledge proof for authentication

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In blockchain technology, there is a technique of authentication in which two parties authenticate each other without revealing the privacy of each other. This process is supposed really unique in regard to security and is known as the Zero Knowledge Proof. It is the cryptographic technique of verification on both ends of the verifier and prover. In this procedure, a party proves an absolute value from another user without knowing their personal information.

There is an extensive range of applications that uses this technique for secure authentications. Such as online apps or websites etc. With the help of zero knowledge Pro many applications are accessed these applications can be for business entertainment and many more. Especially special economic and finance applications used this authentication to verify the users. This authentication can be in the form of a captcha or by solving puzzles. The users who are able to solve the captcha can access the website or the applications or the user who did not authenticate the captcha can not access the applications.

Many digital identifications are verified by using this method of authentication. It can also be used to make peer-to-peer deals but there is also the middle man means the third party confirms from both sides and act as the broker. There are two fundamental parts of the zero-knowledge proof called the Interactive ZKP
or non-Interactive ZKP.

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• Interactive ZKP:

In this process, the prover convinces the specific verifier in the field and then repeats the process for all verifiers. The prover runs a series of verification between different verifiers.

• Non-Intarective ZKP:

There are no limitations in this case in that the specific verifier can authenticate the data and prove it valid but instead, the part creates the proof that can be verified by anyone. Specific software is needed to convey this process of ZKP.

So the Zero Knowledge proof is used in different cases such as in the messengers of the blockchain to encrypt the data and retrieved information.

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Advantages and Disadvantages of Blockchain Technology

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Blockchain technology has a lot of merging key features and advantages in different fields. Along with these advantages, there are also some disadvantages of blockchain technology. Now I will discuss it here.

Advantages

Blockchain technology comes up with a lot of advantages and applications in different fields that make it a reputable technology. Its demand in the field is increasing day by day due to its high amount of advantages some of the major advantages are the following.

• Transparency:

Blockchain technology is transparent technology. The transactions that are made on blockchain technology are transparent and publically seen or approved by anyone. Instead of these all the information or data that is stored is transparent to all that increases the trust of the users.

• Security:

Security is another major feature. There is no third-party involvement in the transactions or data that makes the access of hackers difficult and unpredictable. The security of the blockchain is due to the decentralization of the technology.

• Decentralization:

Blockchain technology is also decentralized and no third party can change the data that is stored. This means the data stored is fully secured and encrypted. The user is the only person to change the transaction's stores and information. This will reduce the access of hackers to the secured blocks.

• Less fees

The transaction proceeds on the blockchain have fewer fees and with these fewer fees, the transactions are processed fastly. The low fees factor increases the worth of the technology.

• Immutablity

The data that is stored on the blockchain is immutable means it can not be changed or varied by anyone. This will increase the user's thoughts on security.

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Disadvantages

Along with the wide range of advantages, there are also some cons of blockchain technology.

• Autonomy
  One of the biggest disadvantages of blockchain technology is the lack of regulation and management from the government or other third parties. Due to this reason hacked data can not be restored in any way in this field.

• Scalability
  Another problem with blockchain technology is the scalability issue. A boosted or reliable system is required to meet the high demand of transactions processing at a time.

• Cybersecurity
  A real concern with using blockchain technology is the threat of cyberattacks. Users are responsible for their own transactions when the security passwords are hacked the hackers can easily access all the data of the users While there are many ways to secure your keys, it is still a potential vulnerability that needs to be managed.

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Conclusion

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Blockchain technology is evolving as increasingly necessary in today's world as a protected and decentralized way of holding and sharing data and assets. It offers benefits such as increased transparency, efficiency, and accountability, and has the potential to revolutionize many industries, including finance, healthcare, and supply chain management.

While there are always challenges and considerations associated with blockchain technology. As such continuous exploration and growth of this technology are important to open its full possibility and change the way we accumulate and exchange information.

So that was all from my side about the importance of blockchain technology. I hope that you all will like to read this post. I would like to invite @steemdoctor1,@chant,@petjwell, and @doopley to participate in the contest.

Thanks for Reading

Regards:@mateenfatima