Blockchain (Blockchain) What is it? Try to understand the technology that is changing the digital world.

Blockchain Technology Is Changing Our World

If you’re an investor in the crypto space, the word blockchain is no longer unfamiliar. But in reality, how does blockchain work? Why is it so secure? And is it possible to apply it in real life? We will take you on a journey to explore this fascinating story.

Blockchain: Security Built from Connectivity

Blockchain, in summary, is a decentralized data storage system, where each piece of data (called a block) is linked together into a long (chain) using complex encryption codes. This makes it difficult for anyone to easily modify, delete, or forge data.

The key difference is that blockchain does not require a “middleman” (such as a bank or verification company) to confirm data accuracy. The entire network verifies collectively, making the system transparent and resistant to tampering.

How Does It Actually Work?

1. Hash Code: “Fingerprint” of Each Block

Each block has three main parts:

• Data (Data): Recorded transactions, e.g., “A sends 5 Bitcoin to B”
• Hash Code (Hash): Unique identifier of the block. If data changes, this code also changes.
• Previous Block’s Hash: The “glue” that holds blocks together.

For example:

• Block 1: Hash = A24, Data = “Transfer 5 BTC”, Previous Hash = 000
• Block 2: Hash = 12B, Data = “Transfer 3 BTC”, Previous Hash = A24
• Block 3: Hash = 5C3, Data = “Transfer 2 BTC”, Previous Hash = 12B

If someone tries to alter Block 1, its Hash will change, which will alert the network that “something’s wrong,” leading to rejection of the change. This is why blockchain is very difficult to hack.

2. Consensus System (Consensus): Community Decision-Making

Blockchain does not allow a single person to make decisions alone. Instead, it uses “consensus” methods such as:

• Proof-of-Work (PoW): Used by Bitcoin — computers compete to solve complex math problems; the first to solve gets to create a new block.
• Proof-of-Stake (PoS): Used by Ethereum — holders with more coins have a higher chance to validate blocks.

These methods make cheating more difficult because to control the system, one would need to dominate more than 51% of the network, which is highly impractical and costly.

3. Peer-to-Peer Network (P2P): Everyone Acts as a Validator

Each person who downloads the blockchain software becomes a “node (Node)” that:

• Stores the entire blockchain data
• Validates new transactions
• Votes on whether a new block is correct

When a new block is created:

1. It is broadcasted to all nodes
2. Each node verifies the data
3. If all nodes agree, the block is added to the chain

How Many Types of Blockchain Are There?

1. Public Blockchain (Public)

• Open to everyone. Examples: Bitcoin, Ethereum, Solana
• Anyone can join, verify, and participate
• Most transparent but slower and energy-consuming

2. Private Blockchain (Private)

• Restricted to authorized members only, e.g., Hyperledger Fabric
• Used by companies, organizations, or institutions
• Faster and private but risk of central control

3. Hybrid Blockchain (Hybrid)

• Combines public and private features, e.g., XinFin
• Sensitive data stored privately, but some transparency maintained
• Requires complex management

4. Consortium Blockchain (Consortium)

• Controlled by multiple organizations, e.g., Corda
• Balances decentralization and control
• Popular among banks and large enterprises

Advantages That Make Blockchain Attractive

High Security: Data is encrypted and cannot be altered or deleted

Transparency: No single administrator can hide data; everything is recorded

Cost Reduction: No need to pay “middlemen” fees, as the community verifies

Traceability: Entire transaction history can be reviewed

Speed and Efficiency: Reduces human errors

Challenges to Consider

Scalability Issues: Currently, blockchain can handle limited transactions (Bitcoin ~ 7 transactions/sec, Ethereum ~ 30 transactions/sec), but new technologies like Layer 2 are helping to address this.

Theoretical Vulnerability (: If 51% of the network is controlled, the system could be manipulated. However, in practice, this is very difficult and costly.

High Energy Consumption: Proof-of-Work requires enormous energy, impacting the environment.

Lack of Clear Regulations: Blockchain is still largely unregulated by official authorities.

Where Is Blockchain Used?

) Digital Finance Cryptocurrencies like Bitcoin and Ethereum are the most visible applications of blockchain. Additionally, many banks are developing their own digital currencies. Thailand’s Inthanon project is one example.

Supply Chain

Companies like IBM have created Food Trust Blockchain, allowing consumers to trace the origin of products from farm to table. Many logistics firms also use blockchain for transparency and anti-counterfeiting.

Voting Systems

Blockchain can create tamper-proof voting systems with transparency and security. Everyone can verify the results, and the results cannot be altered.

Healthcare and Education

Medical records and certificates can be stored on blockchain for security and easy verification.

DeFi ###Decentralized Finance(

People can borrow, lend, or trade digital assets without banks through smart contracts )smart contracts(.

Summary

Blockchain is not just a technology for cryptocurrencies. It is a tool that can transform how data is stored, transactions are verified, and trust is built across various systems. It offers many advantages but also faces challenges such as speed, costs, and regulation. In the near future, blockchain is likely to become an increasingly important and commonplace technology in our world.