Last updated on October 7, 2022 3:43 pm
Friends, Cryptocurrency and Blockchain are the hottest topic of the financial market today! Today we will deep dive what is crypto after all and on what technology does it work and what is What Is Cryptocurrency And Blockchain Technology?
to know this, first we have to understand the concept of currency a little bit!
There was a time when there was no currency in the world, only things were exchanged for goods. After that notes and coins came into circulation and today this is our main currency.
The following are the common currency in circulation in big countries in the world –
|United States of America
The above given Currencies are completely controlled by the currency regulatory institutions of the respective countries, that is, the control of the common currency is in the hands of the concerned government, hence it is also called centralized currency.
Crypto currency is also called digital currency, which is managed through decentralized system. Cryptography is used in these Currencies. It is a Peer to Peer Electronic System which is built on computer algorithm, which means that it has no physical existence. It stays online only as Digits
Crypto currency is completely decentralized, that is, there is no control of any government on it, there is no authority of any agency or government or any board over it, due to which its value cannot be regulated.
What Is Cryptocurrency And Blockchain Technology
A blockchain is a distributed database that is shared between nodes of a computer network. As a database, a blockchain stores information electronically in a digital form.
The key difference between a normal database and a blockchain is how the data is structured.
A blockchain collects information together in groups, known as blocks, that contain sets of information. Blocks have some storage capacity and, when filled, are closed and linked to previously filled blocks, forming a chain of data called a blockchain. All the new information that comes after that newly added block is compiled into a newly created block which once filled will also be added to the chain.
A database usually structures its data in tables,
Whereas a blockchain, as its name implies, structures its data into pieces (blocks) tied together. When implemented in a decentralized nature, this data structure naturally creates an unchangeable time line of data. When a block is filled, it becomes part of this timeline. Each block in the series is given an exact time stamp when it is added to the series.
Blockchain technology is mainly used in the field of cryptocurrencies, but it is the technology of the future and it will be used in banking, health services, logistics, supply chain, property records, smart contracts, online games, voting etc. are likely to happen. What Is Cryptocurrency And Blockchain Technology
Who invented Blockchain? What Is Cryptocurrency And Blockchain Technology
Blockchain technology was first mentioned by Stuart Haber and W. Scot Stornetta, two mathematicians. Those who wanted that there should be a system where the transaction can be recorded electronically and given a time stamp in which it cannot be changed or altered in any way.
Who popularised Cryptocurrency and Blockchain ?
Satoshi Nakamoto is credited with popularizing blockchain technology. It can be the name of an individual or a group of people as their true identities are still unknown. The account was started as
Bitcoin is just one example of a cryptocurrency; Other cryptocurrency networks are also powered by blockchain technology.
The data that resides in the Bitcoin blockchain actually contains the details of the transaction. Information like sender, receiver and account are recorded in it.
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The bank invests your money in the market and earns money. If the government wants, then the 2000 note kept in your hand will become illegal. For all these reasons, the idea of blockchain based Bitcoin was published by Satoshi Nakamoto.
The record of transactions done in Bitcoin goes to millions of computers, not a single pass, and it is encrypted.
Like the bank has the data of all its customers. That is, how much money is in the account of which person. But when it comes to Bitcoin, this is not the case here in the blockchain.
Here no one has everyone’s details, but everyone has everyone’s details. What Is Cryptocurrency And Blockchain Technology
For example you have four friends and are paying each other in bitcoin. If you have 1 Bitcoin left, then all blockchain connected users will have this fact. The transaction will fail as soon as you want to send 2 bitcoins
Not everyone has your ledger, it does not mean that everyone knows your name and address. Because your personal details are encrypted and a digital identity is created which is linked to you, but it is impossible to tamper with it. That is, no one will know who you are, how much money you have where you live.
How does a bitcoin transaction happen?
All users of the Bitcoin network have a public key and a private key. The public key is an address that is known to all the users of this network i.e. it is public. It is similar to an email address. Only you will know the private key and you can also understand it as a PIN or like. A public key is needed to transfer bitcoin to anyone. Just like to transfer money from NEFT/RTGS or IMPS, bank details like account number IFSC etc. are required.
The three most important parts of Cryptocurrency and Blockchain are Blocks, Miners, Nodes.
As you know Blockchain is made up of many blocks in which data is collected, each block has a different hash number which is associated with the previous block and this hash is created when there is a transaction. Is.
With Mining Software, we process the transaction of bitcoin and it is also confirmed. These miners work because if they complete this transaction, then they get Transaction Fees from the users for quick Transaction Processing. Bitcoin miners can never cheat by increasing their fees and rewards or by processing a fake transaction, this is because if someone wants to do this then it will corrupt the Bitcoin Network, and Bitcoin Nodes rejects such blocks which contain invalid data. . That is why the Bitcoin network is secure.
Nodes are maintained in this account book, which are computers in a way that keep the entire network interconnected. There are many similar nodes in the blockchain and each node has a copy of the blockchain . Nodes verify whatever transaction or whatever activity happens in the network and update it in the network, if they feel that there has been any wrong activity or transaction, then all the nodes together cancel it.
What is the difference between private and public blockchain?
A public blockchain, also known as an open or permission-less blockchain, is one where anyone can freely join the network and establish a node. Due to its open nature, these blockchains are protected by consensus systems such as cryptography and proof of work (PoW).
On the other hand, a private or permissioned blockchain needs to be approved by each node before it can be included. Since nodes are supposed to be reliable, the layers of security don’t need to be as strong.
We hope you have come to know a lot about Blockchain, what is Blockchain Technology? How does it work? But if you still want to ask any question, then you can ask by commenting. We would be happy to answer your questions.
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