At present, everyone is looking positively towards the blockchain and considering it as the future technology for having lunch to buy a home. It would not say wrong that everything in the world will use blockchain technology.
In the simple word, "we cannot imagine surviving in the coming world without blockchain technology."
So let us understand what exactly it is and why it is getting popular day by day.
Blockchain is a decentralized distributed ledger that records the transactions of digital assets. Blockchain data is immutable and cannot be altered or modified. Whatever activities are done on the data will be recorded in the blockchain.
I think it sounds a little bit cosy; let us understand in simple words.
I hope all of you have heard about Google docs, where we create documents and share them with a group of people. The document is in distributive mode instead of copied or transferred. This creates a distributed environment and provides access to every one of the documents at the same time. One cannot lock the documents and doesn't need to wait to make the change by another person. If you want to make changes in a particular portion, you can do it, and others want to make changes in a specific portion, he can also make it without interruption and modifications done by both persons are reflected in the documents.
We completely agree that blockchain is much more complicated than Google docs, but the concept is quite similar.
Blockchain explained-quick overview:
• Blockchain is a database that stores an encrypted block of data and chains them together in the form of chronological single-source of truth for the data.
• Complete digital assets are distributed instead of copying or transferring, creating immutable records to any assets.
• Assets are decentralized and allow full access in real-time to maintain transparency publicly.
• A transparent ledger of the changes preserves the integrity of the documents that create trust among the users.
• It is security measures that make a prime technology for almost every sector.
Blockchain was invented especially to reduce risk and bring transparency in a very scalable way.
Let us know how blockchain works?
Blockchain relies on three essential concepts, which are blocks, nodes and miners.
Now focus on these terms and how they work to maintain blockchain technology.
As you know, many blocks together make a blockchain, and blocks contain the transaction record in the encrypted form. Each chain consists of blocks, and each block has three essential elements.
• Data in the block
• Nonce- a 32-bit whole number that is generated randomly when any block is created, and it later generates a block header that has a 256-bit number combined to the nonce, and it must start with a massive number of zeros.
Once the first block of the chain is created, it generates a cryptographic hash, and the data in the block is considered signed and tied to the nonce forever unless it is mined (we will understand what is mining in detail later)
Miners create new blocks on the chain through a mathematical process called mining.
In blockchain, every block has its own unique nonce and hash but a reference to the previous block's hash in the chain. So it is complicated to mine any block in the large chain.
Miners use special software to solve the incredible mathematical problem of finding a nonce that generates an accepted hash because the nonce is only 32 but while the hash is 256 bit. So there are roughly around 4 billion possible hash nonce combinations that must be mined before finding the right one when miners find the possible nonce and add the block to the chain.
Making changes to any block requires re-mining, not with the block but with all the blocks that come after. So it is complicated to manipulate blockchain technology which is a lovely concept for safety purposes.
When a particular block is mined successfully, all the nodes except the changes in the network and miners are rewarded financially.
Decentralization is one of the essential concepts in blockchain technology, which means any organization cannot own a chain but have a distributed ledger via nodes connected to the chain. Nodes can be any electronic device such as a computer, laptop or mobile that maintains copies of the blockchain and keeps the network functioning.
Each node copies its blockchain, and the network approves the newly mined block algorithmically. The blockchain concept is transparent, and every activity and action is appropriately reviewed and checked. Each participant is given a unique alphanumeric identification number showing the transaction.
Extensive use of blockchain in the cryptocurrency:
Cryptocurrency is a digital asset, and no central authority does not control it. To make cryptocurrency more reliable, blockchain is used at a larger scale, ensuring transparency and security to the cryptocurrency regulation. You can buy anything using cryptocurrency, but no one is there to control it, so blockchain came into existence where every transaction is recorded in an immutable way. So whatever transaction you do use cryptocurrency, all are recorded and secured, and no one can change it purposely.
So if you are going to invest in cryptocurrency, always focus on whether it relies on the blockchain or not? Choose the best cryptocurrency to invest in the crypto market based on blockchain technology.
A few reasons behind noticing cryptocurrency:
• Blockchain security makes theft impossible due to the irrefutable identification number.
• It reduces the individual currency and can be sent from one place to another without the interference of others.
• Most of the renowned organizations are coming around blockchain technology. So whatever transactions you will see in the future rely on the blockchain.