BLOCHCHAIN
What is blockchain?
At its most broad, the term blockchain describes a public records system that is autonomously managed by a distributed network of computers called nodes.
Think of it as a fully transparent and continuously updated record of the exchange of information that is saved on a network of computers which nobody fully owns.
This makes it decentralized and extremely difficult for anyone to single-handedly hack or corrupt the system, pretty much guaranteeing full validity and trust in each exchange of information.
All the data is recored in such a way that, after being sequenced, ensures it can’t be adjusted or tampered with by any one or group of dishonest users. Put another way, a blockchain creates a trusted record using cryptography.
Generally (and with some exceptions), blockchains aim to be:
Auditable – Updates stored in the blockchain can easily be tracked and verified.
Distributed – Blockchains often aim to remain outside the control of a single entity (or are collectively managed by a broad set of known stakeholders).
Immutable – Once a transaction is recorded on the ledger, it can never be changed (or if it is, it must be to the agreement of its stakeholders).
Pseudonymous – Each user that interacts with the blockchain does so with a generated address that does not reveal their identity.
Your journey into cryptocurrency starts with downloading a wallet.
In order to fully understand blockchain technology’s potential, one needs to dig deep into the components that power it.
To start off, at the root of the technology lies cryptography, the techniques used for secure private communication, and encryption, the process of encoding that information.
Cryptography
Blockchains today are secured by cryptography, the technique used for securing private communication and the movement of digital data.
Cryptography is the science behind creating codes and cyphers that allows people to transmit information in a private and secure way.
In the early 1900s, cryptography was mainly used by the military and spy agencies, particularly during war, where secret communications were a vital way to send information between posts.
Today, cryptography helps secure transmissions that are held blockchains, making the process of sending and receiving data and information more efficient and cost effective.
Distributed Ledger
On blockchains, digital data is protected through the use of cryptography in a way that creates a reliable record owned and maintained by all participants called a “distributed ledger.”
Envisioned as an alternative to trusted databases, distributed ledgers aim to allow users greater oversight into the maintenance of their data, while reducing liability for companies or entities that might today serve as the central owner of this sensitive information.
Given this impact, there are a variety of industries and organizations using blockchains to set up a trusted network to streamline the sharing of information and the record-keeping process, while improving their performance and security.
Smart Contracts
Central to the distributed ledgers are webs of “smart contracts,” if-then agreements that, when coded in software, can govern the business transactions.
The idea is that, on the blockchain, a program embedded in a protocol’s code could quickly and digitally enforce the kind of contract that today needs to be implemented by a middleman like an insurance agent or financial intermediary.
Since business transactions are governed by contracts, the execution of smart contracts on the blockchain helps the transactional process run more smoothly.
There are many blockchain use cases beyond just cryptocurrency and there has been an endless number of proposed use cases for these computing networks, some more realistic and practical than others.
Improved financial service, insurance, supply chain management and tracking, record keeping, governance and voting are just a few.
In some way, blockchain introduces a new method for things to be done: every node can see all transactions that are happening in the system and should receive a copy of each of them to update its data and, essentially, approve it.
As a result, technology gives us a decentralized version of the database or a digital ledger of transactions that are available to anyone in the network. It allows users to utilize peer-to-peer communication with one another by bypassing third parties (data storages) in almost any operation.
Investing in Cryptocurrency
The easiest way to understand blockchain is to think of it as a fully transparent and continuously updated record of the exchange of information through a system which nobody fully owns.
This makes it decentralized and extremely difficult for anyone to single-handedly hack or corrupt the system, pretty much guaranteeing full validity and trust in each exchange of information.
Understand Blockchain
The easiest way to understand blockchain is to think of it as a fully transparent and continuously updated record of the exchange of information through a system which nobody fully owns.
This makes it decentralized and extremely difficult for anyone to single-handedly hack or corrupt the system, pretty much guaranteeing full validity and trust in each exchange of information.
What is a Crypto Wallet?
Cryptocurrency is a digital or virtual currency designed to work as a medium of exchange.
Cryptocurrencies, are the tokens used within blockchains to send value and pay for transactions. Additionally, you can think of them as tools on the blockchain, in some cases serving as a resource or utility function. Other times, they are used to digitize the value of an asset.
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