Cryptocurrencies are a topic that arouses extreme emotions in people. Mainly due to the fact that their popularity has led many people to the wealth they would not have been able to acquire with work. For this reason, a growing number of people are studying the topic of cryptocurrencies and the blockchain technology on which they are based. How does it work and what stands in the background of this unheard-of technology?
What is Blockchain?
It is a concept that has existed in the IT industry for many years. The first mining of Bitcoin, it became very popular because of the way all mining software works. As the popularity of this cryptocurrency has grown, blockchain technology has also become more favorably considered by industry professionals.
The blockchain is a decentralized digital record of all operations carried out within a given network. The first application was naturally Bitcoin, however now a huge number of projects operate in exactly the same way. Blockchain is fully secure and completely anonymous. It is a technology that resists manipulation. It is impossible to modify it retroactively.
How does Blockchain work?
This technology is most often used for cryptocurrencies and mining os, and its promoter is definitely Bitcoin. Transactions on this network are based on the exchange of digital information between addresses. Each of them is saved and attached to a certain chain of information. This is how the blockchain is formed.
In practice, it looks like the first block, or technical block, numbered as “0”, was mined (dug) in the Bitcoin network exactly on January 3, 2009, for which the cryptocurrency miner, for calculating the result of the hash function, was paid 50 BTC. The 0 BTC block confirmed the transaction involving the remuneration for its calculation. The sum of other transactions was then equal to 0 BTC.
With each new block, the mathematical coefficient is redetermined, and for block 1 it was 1. Bitcoin’s protocol has it that a new block was created initially every 10 minutes, and it takes a while for a transaction to be fully confirmed. When another one is added to the blockchain for transaction confirmation, it becomes difficult to reverse the transaction. In the Bitcoin network, it is estimated that it becomes computationally unrealistic after 6 more blocks are attached.
What is the future of Blockchain?
Blockchain is a solution that does not require the use of transaction intermediaries, and at the same time protects the user from double payment. All because it prevents resources from being spent twice for the same purpose. It confirms the authenticity of each transaction. It can be used in a wide variety of industries, not only financial, but, for example, in services, real estate or e-voting systems.
Consensus in blockchain technology is also worth mentioning. In the new model, groups of computers work together to reach agreement. When 51 percent of the machines comprising the network agree on an issue, consensus is reached. At that point, an operation or several operations are written as a block to the blockchain register and there is no way back.
In conclusion, the current times are characterized by a very high degree of technical sophistication, which has a direct impact on how humanity functions, and blockchain technology carries potential that can be used in many areas of life. for this reason, it is worth knowing how it works and what can be done to enjoy the full potential offered by this solution in the future.
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Provided By CTC Software Company, Sovos
