Besides Bitcoin and other cryptocurrencies, people may hear the term Blockchain technology which is a critical element of cryptocurrencies — without it, digital currencies like Bitcoin would not exist.
In this text, I will give some instruction to those who are new to cryptocurrencies, and new to Blockchain technology.
A Brief History of Blockchain
Firstly, let’s talk about the brief history of the Blockchain. The original the Blockchain’s form was the hash tree which was patented by Ralph Merkle in 1979. Validating data played an important role to make sure nothing was altered or changed during transfer in a peer-to-peer network of computers. Besides, it also prevents from sending false data
The Blockchain was created in 1991 when the Merkle tree was used to create a “secured chain of blocks” — a series of data records, each connected to the one before it. And now, the Blockchain we know today was born and it becomes one of popular world of cryptocurrencies.
How does Blockchain work?
So, then, how does the Blockchain work? Let’s explore the concept of “keys”. Thanks to a set of cryptographic keys, you can get a unique identity. Your keys include the Private Key and Public Key which combined to give you a digital signature.
In the cryptocurrency world, this stands for your public key and your private key is what lets you authorize transfers and other actions with your digital property like cryptocurrencies. This is the reason why it plays an important role in keeping your private key safe. Because if anyone has your private key, he or she can use it to access your digital assets associated with your public key and do what they want with it. And of course, it is very dangerous.
The transaction is signed by whoever is authorizing it when each time it occurs. For example, someone is sending you 0.4 BTC”, will include your public key. And will be signed by a digital signature which uses both your public key as well as the private key. Besides, this gets added to the ledger of that Blockchain when he or she is sending and will also consist of a timestamp and a unique ID number. In each ledger, its transaction will have the same data like a digital signature, a timestamp, and a unique ID. If you move back one transaction in the ledger, you can see that Chuck sent Alice 0.8 BTC at some time. And if you move back other you might see that Dan sent Chuck 0.2 BTC because each transaction will be connected.
Your public key is just a randomized sequence of numbers and letters so you are not to sign with your own name or some sort of handle all the time. It is very hard for you to have the real identity of the person behind it by using the public key.
Why is decentralization so important?
It is familiar with the decentralization which is an aspect of enthusiasts of the Blockchain. This makes the Blockchain impervious to censorship, tampering, or corruption and it is one of its attractiveness.
Copies of the ledger will be stored in many different locations by using a peer-to-peer network. This is the main factor of why most people believe Blockchain technology is the future of currency. And why it is being more and more developed in industries than others.
There’s always a downside
There are always downsides like any system. Blockchain technology has a great steep learning curve especially for someone who doesn’t have a technical background. Currently, cryptocurrency is more and more popular with everyone, so the Blockchain is moving into the mainstream, with a lot of more resources available to make the topic more approachable.
You have to pay the fee for transferring, trading, and buying but is not usually immediately. However, there are so many people, users, and enthusiasts who faithfully believe in blockchain technology is the future. All of them want to see the technology succeed and will be better in the near future.
You should know what Blockchain is in the Top 50 Cryptocurrencies which give you a lot of benefits. Because of its wonderful features, I hope that you will become its faithful user currently or in the future. I hope that you will gain numerous information through this text.