What is Blockchain? Why is everyone suddenly talking about it? Is Cryptocurrency a future currency? And will it wipe out the paper currency? Is blockchain- the future of growth?
We all are curious to know the answers to these questions and why not? After all, it is related to money-making on a large scale. But before diving deep into all those complexities, let me take a step back and familiarize you with this technology in the first place.
As the name suggests, a blockchain is a chain of blocks connected in a crypto network and these blocks contain information about the digital transactions that have taken place. It began as digital timestamps around 1991 but it came into use after Satoshi Nakamoto used it for Bitcoins in 2009.
The blockchain technology focuses, especially on the middle-man elimination principle. It uses the concept of peer-to-peer communication in which each user or participant has a copy of a ledger consisting of all the transactions made. The authenticity or validity of transactions is taken care-off by a group of users or people called “Miners”. These miners are responsible for maintaining the trust of people in the system and its security.
Miners have strong GPU systems that are competent enough to solve highly complex mathematical problems. These validators are then rewarded financially in terms of bitcoins. These working principles form the framework of global cryptocurrency transfer.
The data part consists information about the transaction such as the amount of currency, sender and receiver details. The hash can be thought of like a fingerprint that differentiates it from other blocks in that chain. If you try to change something in a blockchain, its hash gets changed so it can detect the tampering of data.
The hash of the previous block helps in creating a chain and it is the technique that makes the blockchain. If there is any tampering of data in one block, then the next block can easily detect it as this value will get changed. So, a change in data can be easily detected.
Before a new block is added to the blockchain, it is broadcasted to all those nodes which are backed by miners/ validators. Once this unvalidated block arrives at the node terminal, all the miners start competing with each other. The miner which completes the process of validation adds the block into the blockchain is rewarded financially. This process makes this concept unbiased and financially stable.
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