What is Blockchain?
Blockchain is the technology behind Bitcoin and other cryptocurrencies. It provides a structure that is seen as impossible to manipulate and offers a shared public ledger of all transactions ever completed. It is also so far proven impossible to replicate.Once a new block has been completed it will be added to the permanent database. Every time a block is completed a new one will be generated. They are added in a linear and chronological order, forming a chain, hence the name “Blockchain”. Every new block contains a hash of the previous block. It stores complete information about the addresses and transactions and they cannot be deleted. Each computer connected to the Bitcoin network receives a copy of the blockchain automatically upon joining the network. Blockchain stands as proof of all the Bitcoin transactions.
How does Blockchain work?
We already mentioned that it is an ever growing linear chain that consists of blocks. What do the blocks consist of? They consist of transactions that are collected through mining – adding transaction records to the public ledger. Mining is essentially solving a mathematical equation. The reward for solving this equation is a number of Bitcoins that would be agreed upon and the reward will reduce in time. If you go back to the Genesis Block and follow all the transactions validated you will arrive at the current state. As many miners are competing for the next block, there might often be more than one block discovered. This is resolved when one of the two forks progresses. The newest block will be the correct one and the shorter one will be discarded.
Why is this so important?
The blockchain represents a change in how software applications will be written in the future. This technology can reshape how we currently do things and make programs and applications a lot more secure. This why is so important that this innovative technology is well studied and understood. This new computing standard will bring us so many new opportunities with its key concepts – the blockchain, smart contracts, trusted computing, decentralised consensus and proof of work.
We are at the beginning of something great – the situation we are at now is compared to the start of “the internet” back in 1996. The new applications and possibilities this decentralised concept will bring us varies greatly. This is why it is important to see past just Bitcoin and currencies. The change and revolution this paradigm brings is tremendous. This is why whenever speaking of cryptocurrencies and some point out that the Bitcoin bubble is over I find this irrelevant. Cryptocurrencies are here to stay and I am very excited to see what this phenomenal technology will bring us.
Thinking back to the time when the internet was in its infancy, businesses and governments were also sceptical. Some saw it as something only geeks would use and that wouldn’t bring any sufficient use or value to anyone. Nowadays we could not imagine the world as it is without the internet. This is how blockchain-tech will be viewed as in the future.
Join the revolution!
I urge you to get to know this wonderful concept as this is definitely the future. Every year more countries understand its value, though regulations and laws are a bit slow to pick up and some have not taken the needed liberal stand that would help it develop faster, they cannot resist it forever. One of the arguments is still that the price of cryptocurrencies is very volatile and brings a high risk with it. As that is true there’s also another side to it – volatility brings great profits. Cryptocurrencies are one of my favourite assets to trade at the moment exactly because of their volatility. Though the currencies side is only very little part of the possibilities that blockchain brings us that’s where the money is currently and as that industry grows and develops so will everything else.
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