BlockChain to Crypto: What it is and the future
We all are witnessing a sudden rise in Crypto Currencies and this has led to many of us wandering what it is – how it works and what is blockchain – these are some of the questions, we encounter on daily basis when we hear any news linked to bitcoins, dogecoins, etherium, etc. It is believed that these two terms will revolutionise the digital world and banking.
What is blockchain technology?
It is an open, distributed ledger (database), which means the data contained within the blockchain is distributed (duplicated) across many computers (called as nodes) and is therefore decentralised. The information is recorded in such a way that the whole ledger of transactions is distributed and no piece of legible information stays on a single node; making it difficult for anyone to hack or cheat the system because there’s no one central point of attack for hackers to target. The technology makes the system transparent and unchangeable.
On the entire network of computer systems and servers on the blockchain, every block contains information of transactions made. And every new transaction’s information is added to each blockchain participant’s ledger. The blockchain system utilizes an immutable cryptographic signature called a hash to record every transaction and helps in linking every new block created to the previous block.
Even if the hackers are able to tamper with a block – all participants will come to know that the given block linked to them has a problem, which rules out sharing of other block information to hacked block. To successfully hack the system, the hacker will have to tamper with all the blocks which in all permutations is very hard and close to impossible to achieve.
It is based on the principal that as more and more people start using these blockchain methods and be participants on blockchain networks, the number of blocks will grow, making the whole system more secure. The system is more efficient and has no transaction cost (due to distributed user base participating in the blockchain) making the system cost efficient.
Historically, Stuart Haber and W Scott Stornetta, described a cryptographically secured chain of blocks for the first time in 1991. The technology became big in 2008 when Satoshi Nakamoto released a white paper establishing the model of blockchain and digital currency and launched an initial code which gave birth to BitCoin.
Bitcoin & Other Crypto-Currency:
Its one of the most popular use case is adapted in todays world with digital currency known as Bitcoin. It is not just a digital crypto currency, but peer-to-peer electronic payment system, where users can anonymously transfer bitcoins without the interference of a third-party authority (like a bank or government). Bitcoin is just one example of a cryptocurrency, though; other cryptocurrency networks are also powered by blockchain technology. So although Bitcoin uses blockchain technology to trade digital currency, blockchain is more than just Bitcoin. They can now be traded on popular platforms and is being acknowledged by businesses for trading for goods.
We will learn more about these in detail in our next blog!
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