In 1991, two researchers Stuart Haber and W. Scott Stornetta came up with the Blockchain technology to achieve a system in which the timestamps could not be meddled with. It is the misconception of many people that blockchain is a new technology, but this is not the case. This technology remained behind the curtain until the advent of Bitcoin in January 2009.
The earliest cryptocurrency to make use of blockchain technology is Bitcoin, which benefits the users with its low fee. Cryptocurrency is the talk of investors nowadays.
The topic of debate is mostly ‘Bitcoin’ and ‘Blockchain’. These terms are confusing and are generally not understood well even among those who are making millions out of it.
Most people assume it to be difficult, but Bitcoin is very easy to understand. It has made money transactions easy among numerous parties such as immediate-connect.com.
It only requires a wallet to be created and used on a digital currency platform. Bitcoin uses a mathematical algorithm for its protection as it cannot be stored in a physical state anywhere. Whereas blockchain gives access to record the transactions between two people accurately all the time.
It enables many parties to exchange important data and make dealings in a secured and safe environment. Blockchain is composed of three components:
Blocks are central in a blockchain and contain all the information related to a transaction. Every block is stored chronologically and has a unique nonce and hash. It is difficult to disturb the chain.
The extremely difficult task of creating multiple blocks is done by miners.
Nodes are decentralized in a blockchain. It helps in establishing uniqueness, ensuring security and privacy of information, and maintaining the integrity of the blockchain.
How Does a Blockchain Work?
Distributed ledger technology (DLT), also known as blockchain has the responsibility to share and record digital information and protect it from being tempered.
The blockchain contains numerous unchangeable logs of transactions and provides security by disabling the option of altering, deleting, or destroying the data.
Defying the misconceptions, blockchain also offers its services more than only bitcoin in cryptocurrency. People have now begun to think about its applications in the business world.
DLT can be the new business improvement software in the future. Numerous institutions have now stepped in to experiment and find out new ways to use blockchain technology to upgrade their work.
Blockchain’s decentralized nature has many benefits. It has increased the transparency of all the transactions. It works systematically, in nodes and blocks maintaining security. The person can remain anonymous and track the movement of bitcoins and the records stored in the Bitcoin blockchain are encrypted. This upgraded level of security attracts the people.
Is Blockchain Secure?
Blockchain technology offers high security with its advanced programs. This technology can be trusted as the new blocks that are created are stored chronologically. The blockchain adds the new block towards its end which is nearly impossible to alter.
It does not allow going back and making changes in the existing block. The only condition is if the majority of the network is voting in favor of it. The complex system of hash and timestamps make the data secure.
Bitcoin vs. Blockchain
Theoretically, the blockchain has much more extensive use and can store any number of data points. It can transfer any type of information, digital assets, rights, etc. Bitcoin is only the exchange of digital currencies in which it uses the DLT to provide transparent records of payments.
In the current times, blockchains are widely studied. Its uses are explored to be used in a variety of ways that can help society and governments. One of its potential uses can be in the health care system.
Doctors and healthcare staff members can securely save the patients’ medical records, encode and store them on a private key to keep it private and limit access.
In the voting system, Blockchain technology can be a secure way to hold democratic elections with minimal to no chances of fraud with its high security. The transparent and trustable quality of this technology will produce accurate results and reduce the need for in-person voting and counting.
The world is slowly shifting towards this system of transaction and it is expected to take over the traditional payment methods soon.