What is Blockchain and How Blockchain Works

We have seen that blockchain and cryptocurrency are making inroads in the financial sector including Islamic Finance people are finding it quite difficult in understanding what is blockchain and how it makes a difference. Let us understand what is Blockchain and How it works?

Blockchain is a buzzword many people use the word blockchain many Industries will use the word blockchain many firms use the word blockchain but what does it actually mean and how does it relate to a company or any organization which wants to use blockchain what does it provide and what is a blockchain. I think that's the pertinent question here because I'm sure everybody must hear the word or read that particular word.

What is Blockchain

Blockchain and it's very simple if you want to keep it very simple and something which is digestible for everybody blockchain is simply a software so our computers have software right your the apps that you use you know even on your phone the apps I use on your phone any kind of program that you run on your computer whether it's Microsoft Word or whatever you're using that we use on a daily basis these are software the hardware stuff like the computer the body of the computer or you've got external drive or you have you know a USB stick these are the hardware blockchain is software meaning it's something that runs in the back end you don't really you and I if we're using the blockchain it's very unlikely that we'll consciously see the blockchain or what's happening it's something that runs in the back end right so think of blockchain as a computer program it's a software and what and what what is a software if we're saying blockchain in software the question then arises what is software software is simply a set of instructions data or programs which are used to operate computers that's what we mean by software so it's just programs protocols data which are running in the back end of a computer and they are executing specific tasks.

So blockchain is simply that it's some kind of software you can think of and it's running in the back end and it's helping something being performed and being executed and that's really what blockchain simply is and it's very simplistic form. Blockchains are not something physical it's not something you can touch but it's purely software they exist in strings of codes and if you were to look at blockchain you potentially would just see numbers there's somebody who's really like a tech developer if they were to go in the backend and see blockchain it would be it wouldn't make sense to you and me those who are not experts in Tech but for those who are experts in Tech it would make much more sense for them seeing the numbers and seeing the different coding but it wouldn't make more sense to you and I and those people who are not really Tech experts.

If we understand blockchain as software let us deep or diving deeper and answer what is not blockchain right blockchain is not cryptocurrency make that you know everybody needs to understand that cryptocurrencies run on blockchains but they are not synonymous blockchain cryptocurrency are two separate things blockchain is software cryptocurrencies are what's you know transferred on that software you could say so blockchains are not a cryptocurrency that's number one

Number two blockchain is not merely you could say a programming language like you have Java and all these different programming languages right you have python it's not a programming language per se it's not just that it's more than that okay neither is it a cryptographic you could say codification blockchain is not that either okay blockchain is not artificial intelligence plus another whole area so when you talk about AI we talk about artificial intelligence that's something different as well and blockchain is neither like you could say a library or python library or a data Library blocked is not that either and these are where people usually stumble people think blockchain is either some kind of coding library or blockchain is some kind of AI technology or blockchain is potentially some kind of cryptocurrency or some program programming language it's not that.

How Blockchain Works

 If we've negated what blockchain is not the question is what are the features and what is blockchain and all about them blockchain is software it's purely an online Ledger what does a ledger mean a ledger tradition traditionally means a book or document which records information so that's what blockchain is blockchain is a software and it's a software which is a ledger and a ledger records information so blockchain is a means of recording information in a digital space that's what blockchain is all about.

Blockchain records data it allows us to show certain statuses potentially you can confirm certain things in a blockchain you can show certain specifications elements characteristics of blockchain because remember we're recording data so wherever data is recorded and data is required blockchain can help in that space think about data wherever data may be whatever form of data whether we want to show ownership whether we want to show the status of something whether we want to track something because that's a form of data as well or whether we want to show that this thing belongs to this person or this person transacted with this person all of this can be running on a blockchain because blockchain is all about storing recording data and that's why we call it a ledger right so that's what blockchain really is.

If we were to really understand and summarize what we just mentioned so blockchain is not cryptocurrency blockchain is not some kind of coding language blockchain is not something that you normally will see blockchain is software blockchain is a record and blockchain helps in recording data and it has some amazing features which make this form of recording different to the traditional forms of recording and that's really to summarize what blockchain is all about.  

Disclaimer:  The following article is prepared by TAIF with the help of the video available on its YouTube Channel of TAIF. The editing of this article is done by a human after carefully reading and listening to the recorded program, in case of any mistakes and errors we apologize in advance, please write to us at contact@taiflearning.com