Blockchain is the basis of all cryptocurrency, and there is a lot of information about how this works. If you are new to cryptocurrency, there are certain facts that you should know about the blockchain and how it works. This will provide you with a better understanding of cryptocurrency and how they are created and managed.
Blockchain Is A Distributed Ledger
When you look at how blockchain works in simple terms, it is a distributed ledger. It means that it is a real-time ledger of all the financial transactions which have been completed with a cryptocurrency. There is no one person in charge of maintaining or changing the ledger as this is done as and when the transactions occur.
The blockchain of a currency will work on a peer to peer network of computers which are called nodes. Each node will be in charge of checking parts of the ledger, but the entire ledger is entirely decentralized.
Blockchain Records Cannot Be Altered.
When a transaction is recorded in the distributed ledger, it cannot be altered. This is due to the fact that when the ledger is updated, all accounts will be updated and there is no way to update all copies of the ledger on all the nodes. When a transaction is completed on the blockchain, it will be grouped in a block. Each of these blocks will be attached to the blocks that came before, so changing an older block will need newer blocks to be changed as well. Read this interesting analysis from France Initiative about Bitcoin!
This method of work will result in a ledger record that is chronological and cannot be tampered with. Each new block added to the chain will receive a reference to the hash of the previous block which secures the data further.
There Are Many Uses For Blockchain Technology
When people think about blockchain, they will think about cryptocurrency. However, there are many other ways that this technology can be used and there are a lot of companies that are looking into this. These companies have seen the potential of blockchain for other uses such as secure company data and the verification of information.
There are also many people who are under the impression that there is only one blockchain which is used for everything. It is incorrect as blockchain is a form of technology can be created and used by anyone who would like to. If you look only at the cryptocurrency, there are several different coins that you can purchase, and each of them will have their blockchain. The blockchain which is used for Bitcoin will be different from the one that is used for Ethereum because they are different coins and need different ledgers.
There are a lot of facts that you need to know about blockchain technology. It is essential to understand how the blockchain works and the fact that anyone will be able to use it. The security of the transaction records is one of the reasons why more and more people are looking to use blockchain for new purposes.