Blockchain Technology its benefits, types, Ethereum and Blockchain wallet in 2025

 

Introduction

Blockchain technology is an advanced database mechanism that allows transparent information sharing within a business network. A blockchain database stores data in blocks that are linked together in a chain. Blockchain is a shared, immutable digital ledger, enabling the recordings of transactions and the tracking of assests within a business network and providing a single source of truth. In blockchain technology, each transaction is grouped into blocks, which are then linked together, forming a secure and transparent chain. Blockchain is a distributed database shared across a computer network’s nodes. They are best known for their crucial role in crypto currency systems and maintaining secured record of transaction.

How blockchain work

A blockchain consists of programs called script that conduct the tasks you usually would in a database: entering and accessing information, saving and storing it somewhere. A block chain is distributed, which means multiples copies are saved on many machines, and they must all match for it to be valid.

Key features of blockchain technology

Blockchain technology contains several key features including:

·       Distributed ledger technology

·       Immutable records

·       Smart contracts

·       Public key cryptography

Benefits of blockchain technology

Some benefits of blockchain technology are:

·       Better traceability

·       Increased efficiency

·       Enhanced security

·       Automated transactions

Types of blockchain technology

There are four types of blockchain technology

1.     Public blockchain: A public blockchain is open for anyone to join and participate in Bitcoin blockchain. It also comes with drawbacks, including high computational power requirement, lack of transaction privacy and potentially weaker security. These considerations are crucial, especially for enterprise blockchain use cases.

2.     Private blockchain: A private blockchain is similar to Public blockchain. It is decentralized peer-to-peer network. However, one organization governs the network, controlling who is allowed to participate, runs a agreement protocol and maintain the shared ledger. Depending on use case, this infrastructure can significantly boost trust and confidence between participants. A private blockchain can be run behind a corporate firewall and even be hosted on premises.

3.     Consortium blockchain: A group of preselected organization actively manages a consortium blockchain. It shared the responsibility of maintaining the blockchain. These organizations determine who can submit transaction and access data. This type of network is ideal when multiple parties must collaborate with shared responsibilities. In the energy sector, energy producers and consumers might share data about power usage and distribution.

4.     Permissioned blockchain: Businesses that setup a private blockchain set up a permissioned blockchain. It is important to mention that public blockchain network can also be permissioned. This places restriction on who is allowed to participate in this network and in what record transactions. Participants need to obtain an invitation or permission to join.

Ethereum

Ethereum is modular and programmable blockchain that handles applications without relying on a centralized counterparty. The platform is build on the public, open-source and cryptographic blockchain technology. It powers decentralized applications that are supported by smart contracts. Ethereum is the second biggest cryptocurrency by market cap after Bitcoin. Ethereum is transparent and secured through a consensus mechanism. Ethereum is decentralized global software platforms powered by blockchain technology. Everyone can use ethereum; it is designed to be scalable and secure to create any secured digital technology. Ethereum is the foundation for many emerging technological advances based on blockchain. Bitcoin and Ethereum have many similarities but different long-term visions and limitations.

How does ethereum work?

Ethereum uses a blockchain, which is distributed ledger. Information is stored in blocks, each containing encoded data from the block before it and the new information. This creates an encoded chain of information that cannot be changed. On the ethereum blockchain, consensus is reached after the data and hash are passed between consensus layer and execution layer. Enough validators must demonstrate that they all had the same comparative results, and the block becomes finalized.

What is ethereum 2.0?       

Ethereum 2.0 is a major upgrade to the ethereum network. It is been designed to allow ethereum network to grow while increasing security, speed and efficiency and was implemented in September 2022, merging the original blockchain with the ETH2 blockchain. Ethereum 2.0 is necessary because moving a popular crypto asset to a new platform is a compound endeavor, but for ethereum to scale and evolve, it needs to happen.

Application of ethereum

Contract source code

Ethereum’s smart contract are written in high level programming languages and then complied down to EVM bytecode, which is then deployed to the ethereum blockchain. They can be written in solidity. Source code and compiler information are usually published on blockchain explorer websites soon after the launch of the contract so that users can see the code and verify that it compiles to the bytecode that is on-chain.

Decentralized finance

Decentralized finance offers financial instruments in a decentralized architecture, outside of companies and government’s control. DeFi applications are typically accessed through a Web3-enabled power extension, such as MetaMask, which allows users to directly interact with the ethereum blockchain through a website.

ERC-20 tokens

The ERC-20 token (Ethereum Request-for-Comment#20) Tokens standard allow for fungible tokens on the ethereum blockchain. The standard proposed by Fabian Vogelsteller in November 2015, implement an API for tokens within smart contract. The standard provides functions that includes the transfers of tokens from one account to another, getting the current token balance of an amount and getting the total supply of the token available on the network. Smart contract that correctly implement ERC-20 processes are called ERC-20 Tokens contracts.

Blockchain wallet

A blockchain wallet is a digital wallet used to store and manage cryptocurrencies like Bitcoin and Ether, and others digital assets like NFTs. Blockchain.com’s DeFi Wallet also called blockchain wallet. It allows users to send, receive and track their cryptocurrency holdings, similar to how account manages traditional currencies. Blockchain wallets use cryptographics keys to manage access to the funds stored on the blockchain.

How to create a blockchain DeFi wallet?

To create a DeFi wallet, you will need to open an account on Blockchain.com. Once you create the account, you can download the wallet from your device’s application store and log in using the same credentials. You can also use the wallet from your web browser. The blockchain DeFi wallet shows your current balance of crypto-assests and most recent transactions.

Conclusion

Blockchain technology offers significant benefits like enhanced security, transparency and its potential for innovation and decentralized applications is vast, requiring careful consideration of both its capabilities and potential challenges. By reducing costs and enabling greater control over data, it empowers individuals and organizations alike. Blockchain technology itself is quite new, and a lot of developments are still work in progress across the world. Presently, most of them consider blockchain as an important technical invention after the “ Internet”. The decentralized computing example got re-invented with the advent of blockchains due to its merits. The blockchain revolution is now reaching new heights with the release of smart contracts and programmable blockchains.