There is a lot of buzz about blockchain, bitcoin, and cryptocurrency these days. People see blockchain and bitcoin as a large complex concept and get stuck with bizarre content available on digital platforms. To understand the blockchain concept, you need to stop assuming blockchain as a technology by any third planet.
Blockchain is a human developed technology with the simple idea of decentralizing the data storage so that it is not controlled, owned, or manipulated by anyone. The technology is so much in buzz because unlike the other technologies blockchain security cannot be breached or hacked anyway. That is why many businesses are hiring smart contract development company to implement blockchain technology and launch token-sale projects and enterprise-level blockchain initiatives to cover their customized needs
What is blockchain technology?
Blockchain is a digital ledger of transactions that record information with the help of an immutable cryptographic signature known as a hash. The key difference between a simple database and blockchain is the streamline or structure of data. A blockchain collects data together in groups as blocks while a database collects data in tables. The database spreadsheets are structured for a small group of people in which a small amount of information can be stored and accessed. While the blockchain database is structured to store large amounts of data and can be accessed easily by multiple users.
Blockchain vs Bitcoins
Before digging deep into blockchain technology, I want to clear out one misconception among readers. People mistakenly understand bitcoin and blockchain as a completely different concept. But the fact is that bitcoin is the very first application of blockchain technology. In simple words, it is easy to say bitcoin works on the blockchain technology principles.
Bitcoin is a digital currency or a decentralized cryptocurrency system innovated to enable users to do transactions with the help of digital units called bitcoins.
There is a significant spike in bitcoin investments due to its growing popularity and added benefits. It is the first digital cryptocurrency that is completely secure. Bitcoin has created lucrative growth opportunities in the market due to its high liquidity potential. One of the basic features of bitcoin is its autonomous control of users. Furthermore, you can buy bitcoins discreetly.
Bitcoins are performing overwhelmingly and thus people are keen on investing huge amounts in bitcoins. But many countries have strict government rules and regulations regarding bitcoin transactions. If you are thinking of investing in bitcoin, you can use any online broking house. But before proceeding with the investments please check out your government rules for bitcoin transactions. Bitcoin investments are growing at a rapid pace especially in developed countries like the USA. Apart from using any broking companies, you can also buy bitcoin for cash in usa. This is very much in trend these days. You can easily get bitcoin sellers in exchange for cash. With the growing popularity and user awareness regarding digital cryptocurrency and its advantages, people are nowadays using bitcoins for the payment of goods and services in their daily life as many organizations in the USA accept bitcoins payment transactions.
You must be wondering that this process must be very complex but it is very easy. You simply need to register with some broking company to start bitcoin transactions of buying and selling. Further, transfer the funds from your bank account to buy the bitcoins. You can sell bitcoin for usd currency and get the funds back to your wallet.
How does blockchain work?
The answer is a bit complex because several existing technologies integrate together for the working of blockchain.
Blockchain works on three individual process-
- Private key
- A distributed network
- Process of confirmation
Private key-
To understand the private key cryptographic technology assume two individuals undergoing an online transaction. Both of them hold two keys- private and public. The combination of two keys generates a secure identity digitally with some reference points. The secure identity thus created forms a major component of blockchain technology. The keys combinations generate a digital signature which is used for certifying and controlling block ownerships.
A distributed network-
The generated digital signature is coupled with a distributed network. Blockchain technology behaves as a community of individuals that act as a validator. The process is checked by mathematical verification to secure the transactions and networks. The combination of these cryptographic keys and the technology of distributed networks enable different digital interactions.
Process of confirmation-
It is the vital feature of blockchain technology that it validates and confirms the transactions. In the aforementioned illustration of two individuals, blockchain permits one person to use a private key to load transactional information to the public key of other people. This integration process forms a block containing a timestamp and digital signature. The block formed is transmitted across various nodal networks which further act as a validator for the on-going transactions.
The integrations of all 3 steps mentioned above need huge computing power. So a blockchain mining solution comes into existence to carry on secure online transactions.
Why blockchain?
The technology works on blocks. The chain of blocks ensures that these digital currencies are not used in multiple transactions. There is a method called double spending to protect the double-spending by imbuing unique value to every block and further forming chains. It can be done with the help of nodes available in the blockchain network acting as a ledger system and maintaining transaction history for each block by solving the mathematical problem and verifying. Once the block is verified, it is added to the previous chain of blocks.
Unveiling the potential of blockchain technology
There are widespread applications of blockchain technology. Blockchain technology is not about storing only money transactions. But it is more than that, any form of data can be stored on the blocks of the blockchain technology. Blockchain has revolutionized the way data is stored. Several companies like IBM have developed its food trust blockchain to check and trace the journey of foodstuffs to find their location.
In the healthcare industry, the blockchain is used to store a patient’s history and medical records. It secures the confidentiality of patient’s records so that they cannot be changed. Similarly, blockchain technology is effectively deployed in the real estate sectors to efficiently record property rights. In short, bitcoins have a wide scope in the future.
