What is Blockchain Technology?
Blockchain is a decentralized digital public ledger. It is used for tracking economic transactions and much more. Blockchain technology is designed to track and record financial transactions. You can do almost everything in Blockchain technology, and the good thing is it’s a decentralized system that cannot be owned or controlled by an individual. The best feature an individual can get out of this technology is viewing the user’s transactions and holdings that they have executed over the system publicly.
Blockchain technology is transforming many industries by decentralizing the control and cutting the existence of monopolizing the landscape. Blockchain technology is very complex. One must not dive into it without a proper understanding of how the system works. There are many challenges in the system before you go exploring blockchain technology. Let’s have a deeper understanding of how blockchain technology works. What it does is an effective approach in developing your business. Indeed, blockchain is complex. This technology is still young and can grow in the future.
Blockchain technology is a complex stricter that has the capability to track transactions, store transactions. One person cannot control the blockchain. Every transaction done on the blockchain is recorded by the blocks. The nodes also can identify whether the block of the transaction is legit or not. Also, every transaction in this ledger is authorized by both parties’ digital signature, which cannot be copied or tampered with by anyone.
How does it work?
The number one reason why many people use blockchain is that it’s efficient, fast, and most importantly, it’s secure. In particular, an individual who doesn’t trust does have a transaction using a mediator, intermediary, or blockchain as an intermediary. So why many people trust the system? In a blockchain, there are useful features that allow you to view user transactions and holdings on the system; therefore, it’s enough proof that blockchain can be trusted.
The blockchain is comprised of 3 key concepts:
• Blocks – The blockchain’s function is that it records and tracks the most recent transactions that have not gone through yet any prior blocks. Basically, a block is like a book record. Each time the transaction comes through, another block is created. Block store record, which is tamperproof and cannot be removed by anyone.
• Miners – Miners can mine. On average, every available block is mined every 5-10 minutes. Miners who solve a complex mathematical problems are rewarded by bitcoin. This problem is based on a cryptographic hash algorithm and cannot be solved using regular computers.
• Nodes – another important concept of the blockchain, the function of a node is to accept or reject blocks. When a transaction happens in the blockchain, it creates a block. It’s the same with miners. When they attempt to add a new block of a transaction, the node will identify either its legit or fraud transaction block. Basically saying nodes hold the key to the door in the blockchain. Nodes check if a transaction block is valid or invalid. Also, they save and store block transactions in the blockchain transaction history.
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