Every day, you hear about Blockchain terms such as Cryptocurrency, Bitcoin, ICO, Etherium, OLXA coin, and several other terms but do you really understand what they refer to? Do you even know what Blockchain technology is and how it works? Do you know how the Blockchain technology can be used in Business and what is awaiting the technology in the future? This article is going to answer some of these questions.
What is Blockchain Technology?
In simple terms, this technology is based on the virtual digitized decentralized network with blocks of information. When a transaction or any other information is added in the network, it appears in all the computers in the network.
The other thing is that if another person adds their information after yours, then you are unlikely to change your block. Additionally, you can only edit your block if you make it editing from all the other computers in the network and make similar changes but just for one moment.
This is the reason why Blockchain technology is becoming one of the best technologies for saving and structuring information.
The first major application of this technology was Bitcoin which was released in 2009. From that point in time, the whole spectrum of Blockchain changed and several other cryptocurrencies were launched. A cryptocurrency refers to a digital coin that can be used to transact in several points in time.
To understand how this technology works, let’s take a look at how Blockchain works with Bitcoin.
How Does Blockchain Technology Work
First Thing first, Bitcoin Blockchain is not controlled by one central authority. It has no central authority to offer coins and currencies as it is the case with traditional currencies. The technology, in this case, is controlled by a bunch of people who are known as miners.
These miners are sometimes known as nodes on the network. They are the one that is running purpose-built computers which are at the same time competing to solve complex Mathematical problems to facilitate a transaction.
A good example is if there are a couple of people making the same transactions. Take the case of lots of people making bitcoin transactions. Each of the transaction they want to make comes from an e-wallet. The e-wallet has a private key which is known as a digital signature. It also provides mathematical proof that the transaction actually took place and it comes from the owner of the wallet.
If there are a couple of several other people doing the same transactions from different places in the world, then they are gathered together into a block which is organized by strict cryptographic rules. After this, the already formed Block is sent to the bitcoin network with the people running high powered computers.
The computers are in competition to validate the transaction. For one of them to be a qualified validator, it has to solve complex mathematical puzzles and the winner will receive an award.
The term Blockchain now comes from the last step. The validated Block is later added to the previous blocks to form what we call Blockchain.
So, this is how the blockchain technology works. I hope now you have at least an overview of it. But if you want to know more details and you want to become an expert on the blockchain, then you must follow Ernesto Lee, who is an expert in the field. Subscribe to his blog and get in-depth information and the latest trends of the blockchain.