One of the most nagging question in every person would be what is the new trend called Blockchain. In recent days and months, the blockchain has become quite famous in the world with every person taking interest in it. The invention can be dated back to Satoshi Nakamoto, a person or a name of a group of people. Blockchain Technology basically allows the users’ digital information to be distributed creating a new internet. Mostly, the blockchain technology was used for cryptocurrency like BitCoin but now they are used in other areas as well.
Who doesn’t know about Bitcoin? Bitcoin has gained the reputation of being the top-notch crypto with each BTC valued at around $5000. The total market cap of BitCoin is close to $9 billion.
The blockchain technology is built on three important technologies – Private Key Cryptography, P2P Network, and the protocol. It is a decentralized network which is based on the Peer to Peer Network. So, it does not have a centralized database and it is too hard for the hackers to hack into. The database is split into many platforms hence the data is more secure than any existing system.
How Does Blockchain Technology Works?
The three technology mentioned is the reason behind the functioning of the technology. We will explain in detail regarding each of the technology used for building the Blockchain technology.
Private Key Cryptography
Each person present in the blockchain technology has a public key and a private key. Digital Signature of a person is created with a combination of their private key with the public key. Hence, if two users want to transact, using the signature of the users. Since the technology is built on a distributed system, more the number of users more is the security of the network. For instance, the well-known cryptocurrency Bitcoin is secured by 35,00,000 THs which is more than 10,000 banks of the world. A new entry, Ethereum is secured by about 12.5 THs which is more than Google. Hence the technology is very much secured than any existing tech.
As explained above, the tech is formed on a distributed system hence there is no central database. When a person wants to transfer funds from one location to another, they can do it with the help of their private key. A protocol is formed which is a collection of the private key, timestamp and all the other relevant information.
The Blockchain requires a lot of computing power other than that of its users. The term used for it is called mining. People can serve their systems for this purpose giving the tech to use their computational power. In return, they get rewards like Bitcoin or any other crypto which they are serving for. However, mining requires a lot of electricity and it might not be safe for the smaller computers.
The protocol block is used to verify every transaction present with the data. It has the digital signature, timestamp, and other data required for the transaction to be secure and safe. There are many experiments too conducted with the Blockchain Technology. But, all in all, it can be the future of the tech world creating a decentralized and more secured network. Cryptocurrency are changing the way people transact and they are built on the Blockchain Technology.