As online and decentralized currencies rule the world, we all must know all the detailed information about this fast-moving world. The world is changing fast. And to cope up with all of this, we need to change as well. We need to be digitally and technologically skilled and advanced. To do so, we must keep tabs on the latest digital hypes that make people go crazy. Decentralized currencies are one of them.
Sound and strategic investments in these currencies are becoming very profitable for people. People all over the world are trying their experiments with these currencies. If you are interested to learn more and in the best possible way about all this, then this article is for you. In this article, you will learn about blockchains and a complete guide on this.
What is Blockchain?
Let’s start with the basics first because the basics might seem a little bit complicated. But hopefully, at the end of the article, you will get a general overview of blockchains. First, you need to know what is blockchain? It is a database technology that is used for storing data. It is not to be compared with other typical data storing technology because blockchain is very different. It has a unique way of storing information. It stores the data in block forms. Then chain them all together.
Therefore, it is named blockchain. Whenever a new data joins the block, the technology adjusts the system by letting the new data inside the group in chronological order. Now that seems quite interesting. Isn’t it? In the blockchain, you can store different types of data.
But, it is used for storing information regarding ledger transactions. Blockchains are like permanent markers. Once data is stored, it is irreversible and can be viewed by anyone. Blockchain is known as the record-keeping technology behind the ‘bitcoin network.
How Does Blockchain Work?
Up next, you need to know how blockchain works. Which is very important. Or else, the whole point of the article would be useless if you do not have any idea how this genius technology works. To understand the process of blockchains, you need to understand three general concepts of blockchains: blocks, nodes, and miners.
Every chain in the blockchains consists of blocks. And every block consists of three basic elements. There must be data stored in the block. There must be a whole number called the nonce, and it should be 32 – bit. There must be a block header called a hash. The hash is connected to the nonce, and it should be 1 256 – bit number. It should start with numerous zeroes. That means the value of the number is extremely small.
Mining is a very difficult stage to pass through in the blockchain process. Mining is the process where you can create new blocks in the chain. In a blockchain, every block has its unique nonce and hash but also references the previous block’s hash in the chain, so mining a block isn’t easy, especially on large chains. Miners use special software to solve the incredibly complex math problem of finding a nonce that generates an accepted hash.
Because the nonce is only 32 bits and the hash is 256, roughly four billion possible nonce-hash combinations must be mined before the right one is found. When that happens, miners are said to have found the “golden nonce,” and their block is added to the chain. The miners get financially rewarded when all the blocks are safely, properly, and correctly mined in the chain.
The most important condition of blockchain technology is that it is decentralized. No authority owns it. And that is when the work of nodes becomes valuable. Nodes can be any electronic device that maintains copies of the blockchain and keeps the network functioning. Every node has its copy of the blockchain, and the network must algorithmically approve any newly mined block for the chain to be updated, trusted and verified.
This might be the hardest ‘ how does it work’ process you have ever heard of. But cool things are always complicated. Because they are not for the mainstreams. They are for tech geniuses like you.
Is Blockchain Secure?
Blockchain technology is considered to be safe and secured to use because it is decentralized and distributed worldwide. There are no records of blockchain failure. Therefore, it is proven that it is quite harder to hack or perform corruption on the platform. Also, getting illegal access to anyone part will not affect the whole model. Well, that is very impressive.
Bitcoin vs. Blockchain
Now, let’s get into competition and compare bitcoin and blockchain. Bitcoin is a cryptocurrency, while on the other hand, blockchain is a distributed database. Bitcoin is powered by blockchain technology. But, blockchain does not necessarily need bitcoin because it has found many usages of its own beyond bitcoin.
The customer care sector of blockchain is far more complicated and strict than bitcoin. The blockchain market is so much bigger than bitcoin. Bitcoin transfers currency between users. On the other hand, blockchain coins can be used for purposes like information or property ownership rights.
Advantages and Disadvantages of Blockchain
Since blockchain technology is very up-to-date, there should be both advantages and disadvantages for this technology. The good sides of blockchain are, it is secured, it helps to perform instant transactions, and there is no third-party interference in the process. On the other hand, since technology is very complex, people face difficulty developing the system. Once a mistake is made, it cannot be corrected instantly.
What is Next for Blockchain?
If we are talking about the future of blockchain, then we can say that people might put a lot more effort into the technology since it is still extremely complicated to use. Maybe a grand development in the technology can bring more users in the future.
The Bottom Line
The bottom line is that it is a great technology if we give deep thoughts into it. It is profitable. The investment process, the market demand, the value of the digital wallet, the coins, the sectors, stocks and backers, overall blockchain is the ruling king because it is a distributed database. It is a genius technology. If it can be more user-friendly in the future, then it might easily reach the top position.