To sign up for our daily email newsletter, CLICK HERE
What is blockchain? What role does it play in bitcoin and cryptocurrencies, and how can it have a revolutionary impact on many aspects of daily life, government and the economy? In this article, we answer these questions and explain how one of the most significant information technologies of the future works.
Technology is based on a peer-to-peer network that operates without central computers. Any computer on the network can participate in transmitting and authenticating transactions. Transactions are generally public, accessible to all, but only visible within the access rights of a particular user. Moreover, they cannot be undone or circumvented.
Blockchain consists of many interconnected blocks. Blocks that start storing new data are added to this chain when a transaction is performed. In addition, it must be verified (be compatible) with other public records of information. The executed transaction and its details are stored in a block, which gets its own unique hash. When a new block is added to the blockchain, it becomes public.
It is a digital ledger that anyone can look into, but no one can change the data stored in it. In this way, people who do not know or trust each other can make perfectly secure transactions over the Internet.
Data is stored chronologically in sets resembling consecutive pages in a binder, that is, in blocks. The blocks are linked together in an unbreakable chain using cryptography
Blockchain is considered a reliable technology that supports not only the cryptocurrency market, but also many processes in various sectors of the economy.
Network makes it possible to track orders, payments, invoices, production and many other types of information. And because all participants see the same shared version of valid data, all details of the transaction are known at all stages, which promotes trust and creates new opportunities to streamline transactions.
A blockchain network can be built in a variety of ways. It can be public, private or accessible only to authorized users.
A public blockchain is a blockchain that anyone can join and participate in. The disadvantages of this solution include the need for high computing power, little or no privacy in transactions, and low security.
Private blockchain networks
Depending on the application, this solution can significantly increase the level of trust between network users. A private network can work with a corporate firewall or even in a local environment.
Blockchain networks available to authorized users
Companies deploying a private blockchain usually set up a blockchain network with access privileges. It is worth remembering that public blockchain networks can also only be accessed by authorized users. This solution imposes certain limitations.