If you are an investor or have been an active member of the cryptocurrency world, you must have heard about the most trending technology, “blockchain.” Blockchain is a record-keeping technology on which the entire bitcoin network is dependent. Blockchain is different from typical databases as it stores the information and data differently. Blockchain is a chain of blocks, and each block consists of information and data of bitcoin transactions. You can get more information from here luxurylifestylemag.co.uk
Let us learn about blockchain technology on which bitcoin is dependent in detail.
What is Blockchain?
Blockchain may seem complicated, but the core concept of bitcoin is quite simple. In simple terms, blockchain is a type of database or a Google Document that records users’ data. In technical terms, blockchain is a distributed public ledger that records all the bitcoin transactions and makes the ledger available to each user. Blockchain is a database, and therefore, it collects all the information that is electronically stored on a computer. The data stored in the blockchain ledger is in table format and allows users to filter and search any specific information quickly.
You may get confused between a database and a spreadsheet. Let us learn how blockchain is different from a database.
The main difference between a blockchain and a typical database is its storage structure. Blockchain ledger collects all the information gathered in the form of groups, also referred to as blocks. Blocks hold the information and have only specific storage capacities, and when a block is filled, it is chained to its previous blocks, forming a big chain of blocks known as the blockchain. The new information is added into new blocks, and those blocks are further added into the blockchain.
To understand blockchain, users can view how the bitcoin network implements the blockchain. Bitcoin is a computer code that requires a computer collection to store the data into a blockchain. Blockchain records every blockchain transaction that has been ever made. All the computers or nodes connected in the bitcoin network are operated by exceptional individuals or a group of individuals. The computers in the bitcoin network are often referred to as nodes.
In the bitcoin network, blockchain technology has a decentralized nature. There are private, centralized blockchains as well that are operated by an individual. In bitcoin’s blockchain, each computer or node has a complete record of data stored on the blockchain and the transactions that occur. Blockchain records all the history of bitcoin transactions.
For instance, if any node has an error in the information, it can help other nodes correct it. Also, no node can alter the information while being in the bitcoin network. This is why the history of transactions can never be changed or manipulated because the blockchain of bitcoin is irreversible.
Even if any fraudster or user tries to alter the record of transactions, all other nodes will correct that and quickly pinpoint the incorrect information or mistake. Blockchain ledger holds different types of information: state identifications, product inventory of a company or legal contracts, and more.
Blockchain is decentralized in nature, and it is a distributed ledger that is available to the public, which means all bitcoin users can view the blockchain ledger. Each node in bitcoin’s blockchain has its copy of the ledger, updated after new blocks are added. It means that all the users can easily track the bitcoin transactions that take place.
In reality, many exchanges have been hacked and attacked by cybercriminals that held many investors’ bitcoin. Those exchanges that have been hacked have lost almost everything.
Many users have issues of trust and security for blockchain technology. In reality, new blocks in the chain of blocks are always stored in chronological order, and a block is always added to its previous block in the chain of blocks. Once a block gets added into the blockchain, it gets challenging to alter the content or go back. Users need to take care of security issues.
A hacker would require to have control over 51% of copies of the blockchain ledger, which can never become possible. Blockchain uses cryptographic principles to secure the bitcoin network and transactions.