The blockchain is the underlying technology which is powering Bitcoin as well as other cryptocurrencies. It is just the tip of the iceberg. Many people think that blockchain is just like any other technology powering the trading ecosystems. The blockchain is much more than just a technology which is powering the trading ecosystems. The blockchain as a technology can end up transforming various industries quite easily.
Whether you’re looking to start cryptocurrency trading or whether you just want to understand what blockchains, we will shed light on this topic today.
Table of Contents
What is blockchain?
One thing which you need to understand is that blockchain is a technology. It is not just associated with a single cryptocurrency. Moreover, it is entirely decentralized in nature. It can be called a collection of records which are decentralized and sent to different computers which are spread out all over the world. There is no centralized host of server. The information is divided into each block which consists of the details of transactions. These blocks are linked together in order to form a chain. The hash function is used in order to create this chain. Each block is sent to a different computer in order to verify the data. Later on, they combine once again to form a chain.
As each and every block goes to a different computer, there is no centralized control over the blockchain. This clearly indicates that the data is spread all over the world. Also, since the block is encrypted, it is not possible for any individual or the host computer to interpret the data. Moreover, due to the encryption, manipulation of the data is not possible as well. There is an inbuilt layer protection which ensures that the information is not tampered with as well.
The computers to which the blocks are sent actually verify the transaction so that the transactions can be concluded. The transaction can be a chain or it can be the execution of the smart contract.
How was blockchain originated?
Even though blockchain is employed widely only in the last few years but it was 1st drafted in the paper titled new directions in cryptography in the year 1976. The idea was that of a mutual distributed ledger. Later on, in the paper entitled how to time stamp a digital document, this topic was looked into in greater detail. This was actually the advent of the blockchain.
How do cryptocurrencies use blockchain?
Most of the cryptocurrencies use blockchain in order to power their cryptocurrency. The size of the block varies from 1 cryptocurrency to another. That is why the usage of the blockchain by the various cryptocurrencies depends on the block size and the information on the block size.
What are the disadvantages of blockchain?
The only disadvantage of blockchain is the power which is needed to verify the blocks.
Thus, the next time around, you hear about cryptocurrencies and blockchain, now you will be able to know the difference between both of them. Keywords: Bitcoin, blockchain, cryptocurrency, blockchain explained for dummies, blockchain explained in plain english, blockchain explained pdf, blockchain explained youtube, blockchain explained ppt, blockchain technical explanation, what is blockchain, how does blockchain work
