What is Blockchain Technology? A Beginner's Guide to the Future of Money

Blockchain technology has the potential to completely change how companies, individuals and society interact. The decentralized nature of blockchain provides a way to store information so that it cannot be edited or hacked. Many people argue that this technology will revolutionize the internet in the same way as TCP/IP did a generation ago.

What is Blockchain Technology? A Beginner's Guide to the Future of Money
Blockchain Technology

What is Blockchain Technology?

  1. Blockchain technology has been around for over 10 years, and it was created to help solve one of the biggest issues with digital currencies like Bitcoin: double-spending. 
  2. The problem of double-spending occurs when someone tries to spend the same digital token twice, because digital tokens are just entries on an electronic ledger, it’s easy for someone who owns these tokens to make fraudulent transactions and duplicate them if they own 51% or more of all tokens in circulation.

Electronic public ledger 

  1. Blockchain Technology is an electronic public ledger of all bitcoin transactions that have ever been executed. 
  2. It is continually growing as completed blocks(blockchain) are added to it with a new set of recordings.
  3. Blockchain records are tamper-proof, meaning once a block has been recorded, it cannot be altered retroactively.

Note: A blockchain is a distributed ledger that records transactions in a permanent, immutable, and decentralized manner.

The key features of Blockchain technology are:

  1.  Immutable - once data has been written to the ledger, it cannot be altered.
  2.  Decentralized - no single entity controls the data( because of the decentralized concept).
  3.  Permanent - data can't be deleted or removed permanently.

Blockchains achieve consensus through the use of cryptographic hash functions and digital signatures.

Bitcoin, the cryptocurrency with a market capitalization of over $138 billion USD, is built on blockchain technology

What are the Benefits of Blockchain Technology?

  1. Blockchain is a data structure that makes it possible to create a digital ledger of transactions and share it among a distributed network of computers.
  2. This digital ledger can be programmed to record not just financial transactions but virtually everything of value.
  3. The two primary uses for blockchain technology are for recording cryptocurrency transactions and for authenticating digital records, such as domain names or birth certificates. For example, the government departments in Spain and Honduras are exploring the use of blockchain technology in voting systems.
  4. Bitcoin is the first and most prominent decentralized digital currency. It uses blockchain technology for transactions.
  5. Blockchain is a digital ledger in which transactions made in bitcoin or another cryptocurrency like Ethereum, Terra, Tether are recorded chronologically and publicly. The data is stored across a decentralized network of computers, called nodes.
  6. Blockchain creates a shared transactional system without the need for traditional intermediaries, like banks or credit card companies. This means that the records cannot be altered retroactively without changing everybody's copy of the blockchain.
  7. Blockchain technology is an online security system that tracks where bitcoins are when it comes to payments.
  8. Blockchain is a decentralized and distributed ledger that records transactions across many computers in the network (this concept build on blockchain technology). It’s also called “distributed ledger technology”; it is not stored in a single location and users are anonymous.

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