Although not as famous as crypto, blockchain technology is now an option for many companies to process information and transactions. According to a report written by Cointelegraph, blockchain technology or also often known as the digital 'ledger' system is the most important invention since the invention of the internet. Created along with Bitcoin by a person or group of people under the pseudonym Satoshi Nakamoto, what is a blockchain? Here's the full review.

Being popular because of crypto, what exactly is blockchain?

The popularity of cryptocurrencies such as Bitcoin makes the term blockchain no longer uncommon. However, despite the popularity of this technology, not everyone understands what blockchain is. For most people, the definition of blockchain is enough on advanced technology or the latest technology used to buy and sell or trade crypto. In fact, blockchain is not always related to crypto or Bitcoin! So, what is blockchain? The term blockchain itself consists of two words, namely block which means block and chain which means chain. This naming reflects how blockchains work in a network to create blocks that are connected to each other with the goal of executing transactions. Simply put, blockchain is an online global database that can be used by anyone around the world who is connected to the internet. Unlike databases or other databases that are usually owned by certain institutions such as banks or governments, blockchain is not owned by anyone. This makes the blockchain more transparent because it can be accessed by anyone.  Just imagine blockchain like a master cash book in a bank that records all customer transactions, the same thing is also done by this technology, namely recording all transactions made by its users. The difference is that if the master ledger can only be viewed and checked by the authorities, the transactions within the blockchain can be seen by all its users and all the information is permanently stored throughout the user's network, the collected information is also distributed to everyone.  Then, how can this database system be secure? The answer is in blockchain users. The more users there are, the harder it is to hack. The transactions that have occurred will be recorded by the user's computer as well as 'announced' for verification. Well, this transaction record, then combined with other transaction records, is then 'chained' according to the sequence or chronology. This record of transactions which is then called a block and a string of blocks is called a blockchain. The type of data used on this technology certainly depends on what the blockchain will be used for. For example, in Bitcoin, the data inside the block will contain all the details of the transaction, starting from the number of coins, the sender, and the receiver. Reporting from Tirto, by having an open and decentralized database system, blockchain not only makes it possible to make money transactions safer, faster, and cheaper. Permanently stored digital recordings make blockchain a valuable transaction tool, such as property investments, jewelry, other goods and services, and even the counting of election votes. A more interesting explanation to understand what blockchain is, written by Nik Custodio, director of FTI Consulting, a digital business consulting firm, through his writing on Coindesk. Custudio likens physical transactions and blockchain transactions through an apple.   Simply put, in a physical transaction if A gives B an apple, then no significant problems will arise. A no longer has an apple, while B, currently has an apple that can be used for anything.  However, what if the apple transaction between A and B does not occur in a physical transaction but a digital one? When A digitally transfers apples to B, there is a possibility that A still has the apples. Why does this happen? Before making the transfer, A may have behaved fraudulently by duplicating the data by sending a copy of the digital apple to the C. According to Custodio, blockchain can prevent malicious behavior like A. This blockchain function ensures that when A gives a digital apple to B, no digital apple is left from A's hand. If it does, it is most likely a fake digital apple belonging to A. Why? Because digital apple transactions from A to B are recorded in a ledger owned by all parties, not just A and B. This ensures that no one can engineer, the transaction is protected through cryptography. This simple picture can help you to understand what blockchain is.

Still confused about how blockchain works? Here's how it works

After understanding what blockchain is, you should also know how this technology works. Blockchain itself uses a special type of network called a peer-to-peer (P2P) network, in this network each user has privileges, either as a transaction actor or as a person who completes transactions, because there is no longer a centralized central server.  Blockchain work begins when a transaction occurs. When someone makes a transaction, it is broadcast on a peer-to-peer (P2P) network called nodes (individual computers that receive input and provide output). Well, blockchain, which is decentralized, no longer depends on authorities for validation regarding the authenticity of data. Therefore, the validation process in the blockchain is common between nodes to ensure that the information is valid.  Once this transaction has been validated by the nodes and has been verified, it will be combined with other transactions to create a new block of data for the master ledger. The new block of data is then added to the blockchain and stored permanently and distributed to everyone, and can be accessed by anyone. Until here, the transaction was completed. Cara Kerja BlockchainIf the explanation above is too complicated for you, what is blockchain how blockchain works can be explained in a simple example, namely when there is a ball loan transaction between Anton and Budi. Anton, who had 3 balls, lent 2 balls to Budi. Anton recorded 2 balls that Budi borrowed to remember him. In the conventional system, Budi could avoid having received 2 balls from Anton. The reason is, of course, because only Anton has a record of the 2 balls that Budi borrowed. Budi and other friends, do not have these records. However, by using a blockchain system, when Anton was going to lend 2 balls to Budi, immediately the news of the transaction spread, in addition to being accepted by Anton and Budi, the news was also received by their other friends. Anton, Budi, and other friends validated the transaction. If all states that the transaction is true, the 2-ball loan is then recorded. The recording is not only in Anton's book, but also in Budi's book, and also in the books of other friends. To protect it from fraud, the note is protected by a cover and the individual owner cannot delete the note.

Often favored, what are the benefits of blockchain?

Not only is it important to know what blockchain is and how this technology works, but knowing the benefits of blockchain is equally important! It is predicted that it can solve the problem of 'trust issues' in the world of technology, here are the benefits of blockchain that are often favored.

1. Making transparency easier to realize

Many countries and organizations around the world are constantly striving to increase transparency by adding and implementing more rules and regulations. However, the regulations that have been made cannot make the system 100% transparent due to centralization problems.  As previously explained, in this technology, all information can be seen by all users and stored permanently across the user's network, and distributed to everyone without involving the authorities.  So that no party can engineer the information record because previously it also involved the public (nodes) in the validation process. This technology is considered to be able to store a safe and transparent information footprint.

2. Improving security assurance

Blockchain technology can provide better security guarantees. Every transaction and information is secured through the hashing method using hashes. As you know, a blockchain consists of a string of blocks, each block consists of a ledger or ledger and three elements namely data, hash, and hash of the previous block. Hashes are used to identify blocks and their entire contents in unique code. The hash of the previous block is the part that carries a trace or record of previous information that is also useful for securing the blockchain chain. So if someone wants to cheat by making changes in transactions, then that person will not be able to do it because the blockchain network cannot be changed.

3. Save costs

Many companies spend their budget to manage the system because they have to use the services of a third party who has the authority and knowledge. By using blockchain, it will indirectly reduce costs or eliminate third parties. This technology makes all information recording and verification directional and 'permanent', because it cannot be changed.

4. Simplify tracking and auditing processes

With blockchain, the chain of information or transactions becomes more transparent and allows each party to track and ensure that there is no fraud or error during the process until it is completed. This kind of auditing ability is one of the important benefits of blockchain because everyone can see and track data so that there is no longer the potential for embezzlement or fraud because the data in the blockchain is public and immutable (cannot be deleted and edited) and append only (can only be added).

5. Increase efficiency

The next benefit of blockchain is increased efficiency. Blockchain makes all the processes necessary for record-keeping more efficient because the blockchain process does not involve a central party for validation, all these processes run automatically, without the need for multiple checks, everything that runs in the blockchain is transparent and permanent.

Does blockchain have disadvantages?

Although it is often favored, there are still many who judge that blockchain also has weaknesses. Arbitrary? Here are the disadvantages of blockchain.

1. Difficult to modify data

As you know in the explanation of what blockchain is, once a piece of data is added to this system, it is very difficult to change it. Although this is one of the advantages of this technology, many consider that this can also be a weakness of blockchain. Changing data inside the blockchain often requires a hard fork. What is a hard fork? A condition in which one chain is abandoned and switched to a new chain, in other words the old version remains on the network while a new version has been created.

2. Difficult to set up

The decentralized nature of this technology makes the parties in the network spread in various parts of the world and of course they are all different parties. If the network needs renewal or technological development, then this renewal must be approved by all parties, if there are several parties who disagree, then the renewal may not occur. Changes in this system are closely related to hard forks and soft forks.

3. Storage issues

The ledger in the blockchain can grow so large and fast. The development of the storage size of blockchain technology is faster than the development of hard disks, for example, the Bitcoin blockchain requires about 200 GB as a storage place. If it gets bigger, as reported by Binance Academy, there is a risk that an individual will lose nodes if the cash opening becomes too large.

How is blockchain developing in Indonesia?

In Indonesia itself, many financial industries have applied blockchain technology. There are many blockchain technology companies, for example Blocksphere, Blockchainzoo, Blocktech, and Indonesian Blockchain Network. This company will help other companies or organizations to implement blockchain technology in business. Many banking institutions are also looking at blockchain, as reported by Kontan, BCA claims to have applied this technology but it is only limited to the interests of the company's internal activities.  There are also five large companies from Indonesia, namely Bank Mandiri, BNI, BRI, Danamon, and Permata that collaborate with the United States giant technology company, IBM, to implement blockchain technology. According to Senior Vice President of IBM Industry Platform, Bridget van Kralingen, this banking solution called IBM blockchain will help the financial industry speed up payment transactions, reduce transaction complexity, especially in the back office, while reducing operational costs. The use and use of blockchain in Indonesia continues to grow slowly, there are many local companies and startups that are applying this technology in various fields, not only limited to the financial industry.

Secure forex trading with blockchain technology in GIC

Not only the crypto industry uses blockchain technology, currently forex investment and trading also uses this technology, so it is safer and more transparent. Although not many forex investment companies use this technology, we are the only one in Indonesia. Don't worry if you're a beginner, GIC has an ecosystem that will help you start from trading platforms, trading education, copy trading features, and other features that make it easier for you to invest. Not familiar with GIC? Let's get acquainted. Unlike other conventional brokerage firms, GIC through the GICTrade platform provides a solution for traders who do not want to be charged with high trading fees. GICTrade is a peer-to-peer trading platform that brings together traders and market makers. So, what is special about GICTrade? As a platform that brings together traders and market makers, you as a potential customer can certainly choose between the two, namely becoming a trader or a market maker. GICTrade's role as a transaction venue provider can minimize costs and help maximize profits for traders and market makers as well as create a fair transaction atmosphere and results. Traders will benefit from the absence of commission fees and low swap fees and spreads due to the presence of market makers as liquidity providers. You can also join the trader community on GICtrade's Telegram to ask fellow traders directly about their trading experience. Also follow GIC's Instagram to get webinar information and various attractive prizes. In addition, on YouTube GIC, traders can also learn to trade for free! What are you waiting for? Get more features that fully support you to start investing and trading forex through GIC. Make transactions simpler, safer, and more profitable. Start by creating a demo account. How can you no longer be confused about what blockchain is?