If you have been following the whole crypto currency trend of how bitcoin is shaking the world and how it’s the best asset you can purchase at the moment you must have heard of Blockchain Technology.
But what exactly is Blockchain Technology, and how can it be helpful to you?
Well, block chain is a record keeping Technology, that’s behind Bitcoin’s network.
It’s an easy to understand concept and it’s not something you should feel you’ll never know about.
Let’s define what block chain is
What is Blockchain?
At the simplest level, block chain is a chain of blocks, and no it’s not the literal “chain and blocks” that we know, rather it’s in a digital sense a block chain.
We can say it like this, that the digital information in the cryptocurrency world is the block and the Chain is where these blocks (information ) are stored.
But what comprises these digital information, these blocks?
Well the block can store 3 types of info;
- A block can store a time of a transaction, the date and then dollar rate of the transaction, used for any of the cryptocurrency platforms.
- Blocks can also store information regarding who is involved in these transactions, the name of the person, but this time it uses something like a digital signature, look at it like a ‘username’ but not the actual name of the person.
- Block also stores information that can distinguish themselves from other blocks, something like an id that’s unique to a block. Even if previous transactions of the SAME person is similar, it can be differentiated because of its hashing system
So you may be asking, how does Blockchain work? And how does it relate to stuff like Bitcoin.
Let’s talk about this.
How does Blockchain work?
- For Blockchain to work, a transaction has to occur, when this transaction occurs, it is set for the next stage verification.
- The Transaction must be verified, if you carry out a transaction on any cryptocurrency it must be verified, hence but being fake, only then can it be added to the block. A lot of checks are carried out in the background that makes this possible.
- After the transaction is verified, it has to be stored in a block, the amount involved in the transaction, your name / digital signature is added to a block, stored with others transactions like this in their own individual blocks
P.S: Thousands of these blocks exists with yours at the same time
- The block is given a hash (unique key) which helps to differentiate it from other ones, this hash can be used to identify a particular block for future use.
Is Blockchain Private?
NO! Anyone can see the block chain activity for any Currency of interest but a user can decide to connect his computer and use it as a node.
If this is done, it whenever a block is updated automatically he receives a copy of it so look at it like a Twitter news feed kinda thing.
All computers in the Blockchain circle are connected to the network and hence receive a copy of the block chain, although these copy of the block chain look alike, when you spread the information to all computers it becomes hard to manipulate the data.
Doing this will make a Possible hacker to hack all copy of the Blockchain in every computer in the network.
Is BlockChain Secure?
After a block has been added to the top of the Blockchain, it is extremely tough to return and alter the contents of the block. That’s as a result of every block incorporates its personal hash, together with the hash of the block earlier than it. Hash codes are created by a math function that turns digital info right into a string of numbers and letters.
Here’s why that’s essential to safety. Let’s say a hacker makes an attempt to edit your transaction from your Bitcoin Exchange Platform so that you actually have to pay for your transaction twice. As quickly as they edit the quantity of your transaction, the block’s hash will change.
The following block within the chain will nonetheless include the outdated hash, and the hacker would want to replace that block as a way to cowl their tracks. Nonetheless, doing so would change that block’s hash. And the following, and so forth.
As a way to change a single block, then, a hacker would want to vary each single block after it on the blockchain. Recalculating all these hashes would take an unlimited and unbelievable quantity of computing energy. In different words, as soon as a block is added to the blockchain it becomes very difficult to edit and impossible to delete.
How Blockchain helps in Cryptocurrency
Blockchain forms the bedrock for cryptocurrencies like Bitcoin. As we explored earlier, currencies just like the U.S. dollar are regulated and verified by a government, normally a financial institution or authorities. Beneath the central authority system, a consumer’s knowledge and currency are technically on the whim of their financial institution or authorities.
If a consumer’s bank collapses or they stay in a rustic with an unstable authorities, the worth of their currency could also be in danger. These are the troubles out of which Bitcoin was borne.
By spreading its operations throughout a community of computer systems, blockchain permits Bitcoin and different cryptocurrencies to function with out the need for a government.
This not solely reduces danger but in addition eliminates most of the processing and transaction charges. It additionally provides those in international locations with unstable currencies a extra secure currency with extra purposes and a wider community of people and establishments they will do business with, both domestically and internationally.
So as you can see, Blockchain is a very interesting concept that has powered interesting stuffs like bitcoin and other cryptocurrencies.
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