Blockchain technology – The Heart of Cryptocurrency

10 Jan

Blockchain technology – The Heart of Cryptocurrency

Basic Knowledge, Instruction

Blockchain-based service systems has had big influences on many fields in the world. It is considered revolution in the Internet world. Once hearing about Blockchain – the platform used to build Bitcoin, you should learn to understand why it is called an Internet revolution.  

What is Blockchain and the appearance of Blockchain

It was born in 2018 by Satoshi Nakamoto and Bitcoin is one of this technology’s products. Blockchain currently is devided into 3 versions:

  • Version 1: Cryptocurrency application
  • Version 2: Banking and financial application
  • Version 3: Spread to all fields  

A blockchain is a consecutively growing list of  blocks. They are interlocking chains that are seamless and can not be torn, replaced, overturned, or forged. It is applied the peer-to-peer algorithm, transaction verification, transaction encryption and re-enter the next blocks. When the first string is completed, a second block will be generated, which is joined by hashes and in this way, the next blocks are completed.

Blockchain provides hierarchical data that is called “technical ledger” that stores all encrypted information, transactions. And an interesting thing is that this ledger is open and limitless. That means anyone in the peer-to-peer network can see the information, but no one can change the encrypted information that has been put into the blocks.

Keywords related to Blockchain

Smart contract

Smart contractSmart contract

It is a term that describes the ability to automatically generate conditions and execute computer system agreements by using Blockchain technology. All Smart Contract operations are automated and do not involve any external intervention. In Smart Contract, terms are considered a legal contract and are saved in the language of the computer system.

Smart Contract was created with the aim to allow two anonymous parties still can make transactions or work together on the internet without the help of any intermediary.

Proof of work

Known as the working algorithm, this algorithm helps miners solve mathematical equations. There are many ways to solve a mathematical equation, but the system only chooses the optimal solution. The Blockchain system can not be cheated because it owns a list of legitimate answers.

Bitcoin

This is the most popular cryptocurrency which uses Blockchain to store and confirm the exchanges of cryptocurrency.

When new blocks are created, on average, it takes about 10 minutes to produce the corresponding Bitcoin, which currently is 25.

These blocks are linked to the bill of payment along with enough information about the time as well as the transaction money. Moreover, these blocks will become chains in the Blockchain.

Therefore, any peer-to-peer user can access the historical information of all transactions while information is still completely secured.  

Decentralized

This concept is the core of Blockchain and Bitcoin, which is understood to be distributed in a decentralized manner. Information is encrypted by the Blockchain system and is not stored in a particular location that can be hacked or influenced by human factors such as corruption.

Blockchains link the Blocks that are stored on many different machines in peer-to-peer worldwide systems together to ensure maximum security for encrypted information  and for users.

Ethereum

EthereumEthereum

As a Bitcoin’s competitor, the Cryptocurrency Ethereum provide enhanced Blockchain-based functions.

Blockchain technology  was promised to be far beyond simple transaction and cryptocurrency storage. Ethereum realizes this when applying the feature Decentralized to encode contracts or transactions. These contracts are also known as Smart Contracts.

Actually, Bitcoin can be considered a prototype of Blockchain, while Ethereum is a more better upgraded version. Ethereum is also causing big waves in the business market. Microsoft is one of many major technology companies that integrates Ethereum into its development system.

Free Market

Small startups have got many benefits from the Blockchain. Many companies have been established that create thousands of jobs in the world so far.

Companies appear in many fields from economy to technology startups that bring the Blockchain solution to the Internet of Things.

Many large companies are also gradually accepting Cryptocurrency and experimenting with Blockchain with the aim to get the benefits from it.

Genesis Block

This is the first block on Bitcoin Blockchain, also known as the original block. The first block belongs to the founder Satoshi Nakamoto. This block contains 50 BTCs.

Although initially, Blockchain and Bitcoin were not created for money, Satoshi Nakamoto – the person behind this technology is now sitting on a treasure chest called the Genesis Block.

Hashes

Blockchains are connected by Hashes. They are the result of the decoding of computers in the mining world. Approximately 10 minutes, one block is decoded and 25 Bitcoins are generated.

These hashes are designed to allow the information in the Block to convert to hashes, but the vice versus is completely impossible. Moreover, a small modification in the Block can create a completely different hash chain.

After the algorithm is solved, the hash of a Block is compared to the other hashes of the same Block but it is processed with other systems to ensure that all Blocks has the same content and are not edited.

In these ways, hashes ensure the absolute security for transactions on Blockchain in general.

Intellectual Property

With many people, Blockchain is the answer for the robbery of pirated softwares and illegal downloads.

Despite just being theoretically defined, Blockchain’s complete security capability can be used to prevent any unauthorized sharing activities.

Nowadays, social media like movies, music and even specialized softwares and games can be shared online. This has caused economic losses for media product publishers.

BlockChain with its great value has created spectacular changes in the Fourth industrial revolution. If you know Cryptocurrency, you hear about Bitcoin, you should learn more about Blockchain and its great values as well.  

5 (100%) 1 vote

0 Comment

Would you like to join the discussion? Feel free to contribute!

2 Pingbacks

Write a Reply or Comment