With the rise in popularity of Bitcoin and other cryptocurrencies reaching more mainstream media outlets, naturally, people will want to know how they work.
Blockchain technology does not only help record cryptocurrency transactions, either. In fact, the healthcare industry will adopt blockchain technology in 55% of its healthcare applications by 2025.
So, why all the buzz? That is why we’ve created this concise, Blockchain technology guide.
A guide that will inform and educate you on the basics of Blockchain technology. The technical operating system behind many of the most popular cryptocurrencies.
What Is Blockchain Technology?
Blockchain technology is a distributed ledger technology that records decentralized, peer-to-peer transactions of digital assets. These transactions operate without needing a third-party intermediary such as a bank.
The decentralized nature of Blockchain technology allows it to remain private. It is also more transparent and accessible. The peer-to-peer (P2P) aspect of Blockchain technology allows greater security between transactions.
This type of security outperforms traditional client-server networks.
It may help to picture Blockchain technology as a giant, shared excel spreadsheet.
The spreadsheet gets shared across multiple computers called nodes. Every time there is an update to the database, it gets recorded and downloaded on every node in the network.
Blockchain technology remains secure because of its cryptographic security. However, this type of security does not allow changes to get made to the ledger.
For hackers to make changes to the ledger – they would have to infiltrate over 50% of operating computers or nodes. The more nodes, the more secure the ledger is.
How Does Blockchain Technology Work With Cryptocurrency?
The cryptocurrency market has seen a 900% increase from March 2020 to February 2021. A marketplace that is now worth approximately 324.7 billion dollars. The cryptocurrency business is big business.
However, the Blockchain behind the rising cryptocurrency markets is unknown to many people.
The foundation of Blockchain technology was invented along with the first cryptocurrency, Bitcoin. No one is exactly sure of its origin. It is believed to have been created by a group of people, or a single person know as Satoshi Nakamoto.
To understand the Bitcoin blockchain is to understand all cryptocurrency blockchains. To understand bitcoin halving is to understand why it is being called “sound” money.
The Bitcoin blockchain is a database ledger that records only Bitcoin transactions. There is no centrally located ledger – it gets shared across a network of computers, known as nodes. Each node must confirm and agree that every transaction is authentic.
These agreements are known as a “consensus” during the Blockchain mining process. Once each node agrees that the Blockchain mining transaction is authentic, it gets added to the ledger, or “block.” It is then recorded below the previous transaction on the ledger.
For individuals to conduct actual transactions on the ledger, the nodes have to confirm two things. One is the amount of Bitcoin the user is sending. Two, being that amount hasn’t been sent to anyone else on the network.
All other cryptocurrencies base their existence on Bitcoin blockchain technology.
Blockchain Technology Is Here to Stay
With the increasing popularity of cryptocurrency trading and transactions – Blockchain technology is here to stay. Its widespread adoption from major economic industries like healthcare and finance proves this. If anything, we hope this article has inspired you to continue to learn more about the fantastic developments and opportunities in Blockchain technology today.
Don’t forget to check out other great Blockchain technology articles from our blog – see you there.