A blockchain is a kind of distributed database or ledger, shared among the nodes of a computer network. As a database, it stores information electronically. 

It arranges data into blocks that are strung together. Blocks have some amount of storage capacities and are linked to the previously filled block. It forms a chain of data and is known as the blockchain. The main difference between a typical database and a blockchain is the way how the data is structured.

Working of blockchain:

The aim of blockchain is to record digital information and distribute it, but don’t allow editing it. So, it is a foundation for immutable ledgers, that cannot be altered, deleted, or destroyed. For that reason, blockchains are also known as Distributed Ledger Technology (DLT).

Blockchain Decentralization

For example, a company owns a server with 1000 computers used to maintain a database. This company has a building that contains all of these computers under one roof. It has full control of each of these computers and all of the information. There are some situations by which the data can be harmed like electricity going out, poor internet connection or an unauthorized person can manipulate it.

So, it allows the data held in that database to be copied out among various network nodes at different locations. However, this creates redundancy and maintains the fidelity of the data. So, if an unauthorized try to manipulate a record at one instance of the database, the other nodes would not affect and it would prevent an unauthorized from doing so. 

Pros and Cons:

Due to its complexity, blockchain has potential as a decentralized form of record-keeping is almost without limit. But there are also some disadvantages.

Pros

• By eliminating third-party verification, reduction in cost.
• Transactions are private and efficient
• Decentralization makes it harder to manipulate the data.
• Transactions are secure.
• Transparent technology.
• Provides a banking alternative. 

Cons

• The number of transactions per second is a little bit low.
• Limitations for data storage.

Benefits of Blockchains

Accuracy of the Chain

Transactions are approved by a network of thousands of nodes on the blockchain network. This almost eliminates all human involvement in the verification process, due to which there is less human error and an accurate record of information.

Cost Reductions

It eliminates the need for third-party verification and its associated costs. 

Decentralization

Blockchain does not keep any information in a central location. Whenever a new block is created, every computer on the network updates its blockchain. By copying the information across a network, rather than storing it in a central database, blockchain becomes more difficult to manipulate. 

Private Transactions

Some blockchain networks operate as public databases. However, users are able to access details about transactions, but they are unable to access identifying information about the users. 

Secure Transactions

After a transaction is recorded, its authenticity is verified by the blockchain network. After a node has validated the transaction, then it is added to the blockchain block.

Transparency

Blockchains are entirely open-source software. This means anyone can view its code. This allows auditors, the ability to review cryptocurrencies. 

Is Blockchain Secure?

Blockchain has decentralized security and trust in various ways. To initiate with, the new blocks are stored linearly and chronologically, they are always added to the end of the blockchain. It is extremely difficult to go back and manipulate the content of the block, once a block has been added until a majority of the network has reached a consensus to do so. However, each block contains its own hash. Hash codes are generated by a mathematical function, that converts the digital information into a string of numbers and letters. Hash code will be changed as someone edits that information. So, it secures to use of the blockchain.