Blockchain is the technology that everyone associates with Bitcoin and cryptocurrency. However, she is much more than that. Thanks to its versatility, it has potential for use far beyond the realm of cryptocurrencies. However, we will focus in this text on the use of bitcoins. In the last few years, this technology has reached the peak of its popularity, as people all over the world now have the opportunity to trade securely in a decentralized network that cannot be changed so easily.
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The digital currency Bitcoin has generated a lot f interest among people around the world, as it has introduced a number of innovations in the digital finance sector. However, it was not that long ago. It actually took a few years until people saw the full benefits of this technology. The first thing they noticed was the huge difference between this and the classic economic system in which all transactions take place with the mediation of banks and state authorities. Blockchain technology has forever changed the way banks and government agencies operate, as it has enabled complete data security.
It is a chain of blocks connected by cryptography. Blocks are connected to each other. It’s an opportunity to avoid middlemen in every transaction. Unlike a classic online database, blockchain technology implies communication at the level of several different servers between which the transaction is performed. After the end of the exchange, extraction of ores or mining takes place.
Features of Blockchain
The main features of this technology are transparency and data immutability. Regardless of the nature of the data, it will forever remain immutable while at the same time being verifiable by the user. No matter how powerful an institution is, it cannot change this database which means we don’t have to trust one person exclusively. It is enough to trust the most secure technology that makes something like this possible. In that case, we can say that blockchain technology has unlimited potential. It is a revolution that motivates all sectors to turn to decentralized solutions.
For the extraction of cryptos, it is necessary to provide high-powered computers in order to extract the existing ones and create new blocks. In this way, new Bitcoins are generated as a currency and that affects the price too. For bitcoin price in real time visit here and always be up to date with latest spikes in price. Merging a transaction with an existing block chain is done using a node. This array contains data about each transaction. Blocks are logically connected to others which means that they are definitely immune to fraud, and the same cannot be said for banks.
Bank data is quite exposed to illegal activities and can be hacked very easily. If you tried to do something similar with Blockchain, you would have to hack the entire chain of blocks. It is not possible to do that which means that this way of storing data is the future for all of us. In this way, the factor of human error is eliminated forever, because the blockchain never makes mistakes.
What are hashes?
We have to mention that blocks contain timestamp, data and hash. It refers to each block which is unique. We can say that it is a digital fingerprint. It is also important to know that the data recorded and verified within the block cannot be changed. If it is necessary to do something like that, the changes are transferred to the next block.
Everything is recorded, verified and recorded in it. The new block contains the hash of the previous one and strengthens the entire block. This function is a mathematical algorithm that maps data. For example, if you wanted to represent a list of names of different lengths, this function would represent them as a unique string of numbers, and that string is called a hash.
Types of blockchain
Since the blockchain is not responsible for describing a specific database but works in different ways, there are also different types of this technology. The most famous is the public blockchain such as Bitcoin. It allows anyone to join the network. A closed network describes the private sector that also uses decentralization and system, but is controlled by a single center.
In this case, access is limited to this network. In addition, we can also talk about hybrid blockchain. It represents a combination of public and private. Here, some data is publicly available, but a lot of data has limited access because it is very sensitive data.
Advantages of blockchain technology
If you join a decentralized system, you will have the opportunity to experience many advantages. In the first place is the trust that you will not get in other places. In fact, this technology is redefining the concept of trust that you know so far. For the first time in history, it is possible to design systems that fully guarantee the security of the transaction. The reason is the decentralization of the network and cryptocurrencies. As we mentioned before, transparency is one of the main characteristics of blockchain technology.
Since cryptocurrencies are open source, you will have insight into all transactions on the blockchain. Best of all, the history of previous transactions cannot be deleted and is therefore immutable. Regardless of the time period, it will not be deleted from the network and the only way to make it disappear is to crash the entire system. So, security is the main reason why more and more people are turning to this technology.
Today, networks are exposed to various hacker attacks and it is necessary to take all preventive measures. However, no matter how hard you try and invest in technology, hackers will do it even more. Fortunately, the blockchain is the furthest they can go, because it is impossible to bypass. This network is very complex and thus protects all your rights. We must not forget about the speed of data processing. Unlike traditional systems, cryptocurrencies are sent instantly. It does not include large commissions, and the concern is not affected by the power of the Internet.
Blockchain can offer you much more than the known systems. Bitcoin is one of the leaders when it comes to the blockchain network. However, try to look at this technology in a general sense. It definitely deserves a broader review of the entire system.