The history of all cryptocurrencies began with the development and launching of bitcoin in 2009. Its extraordinary success triggered the new spiral of technical development and innovations. But what do we know about the technology on which all cryptocurrencies are based on? In this article, we are going to explain the phenomenon of blockchain, how it works and why it is needed.
Blockchain is the latest technology in the world of engineering that came into use not only for the cryptocurrency sphere but also for the storage and processing of personal data, identification, the game industry, marketing, etc. In order to assess the potential of blockchain, we need to explore the principles of operating the technology. To be short, blockchain is an ongoing circuit or chain of blocks. It includes data about all transaction records. No one can edit or delete these data. They just can add new blocks of information. Important to know that all recorded data is stored on all computers of the participating blockchain simultaneously. So, everyone can check if all transactions are right at any time. Each block in the blockchain network contains a link to the previous one. A block in the system cannot be changed or deleted, only new blocks can be added to the network. Thus, you can always restore the transaction history of each particular asset and discover its current owner.
Blockchain is also called the technology of distributed ledgers because the complete chain of operations and the list of coin holders are stored on many devices owned by independent users.
In case something happens to some of the computers, all information will be available since other participants are still running an exact copy of the blockchain. As a result, the blockchain, data on asset owners cannot be forged. After all, this data is stored on a huge number of computers belonging to a large number of independent network participants. The concept of consensus was introduced in the blockchain in order to provide the system with absolutely complete and correct records. Thus, if some participants of the network turn their computers off and transaction information is not recorded or is incorrect, it will not affect the operation of the network. The main task of the consensus procedure is to reach an agreement and provide users with correct information. Important to note, that blockchain technology underlies cryptocurrency. However, it is an obvious advantage for the crypto industry as it provides security and protection of transactions.
The advantages of blockchain
If we speak about blockchain, then there are some peculiarities that you may be interested in. For example, blockchain may be used in different spheres and be applied to various assets such as digital tokens, shares, real estate, gold, etc. Also, the time for transactions is relatively short, but it still depends on the consensus algorithm and varies. For instance, we should wait 20–60 minutes for a transaction confirmation with bitcoin since it is determined by the coin feature. Other blockchain technologies are much faster in terms of transactions and can be nearly instantaneous. You can buy, sell and exchange more than 20 cryptocurrencies on bit4you without limits. Bit4you provides its customers with the opportunity to test different trading and investment strategies with Demo mode. Also, applying technical and fundamental analysis, you can go to the next level of trading by monitoring the charts and graphs, shown on bit4you and reading the news section of the website. You will receive $100 000 of virtual money to explore the crypto market and discover the main principles of its functioning before starting to trade with real currency.
Valentina BEREZA, Team bit4you