To put things simply, a blockchain is known as it is due to the fact that it works in the shape of a sequence of the block but in an unconventional manner than the mainstream sense. When there is a mention about the combination of words block and chain, it actually depicts that we are referring to digital information which is saved in the public database or “chain”. More particularly the blockchain consists of three parts which are as under:
Blocks save the data regarding transactions like date, time, amount of the recent purchases which are made online or even offline.
Blocks tend to store the information about the ones participating in a certain transaction while the block for your purchases might also need to record your credentials with the merchant. Usually, instead of utilizing the actual name, the purchase gets stored without any identifying information with a special digital sign or more appropriately a username.
The blocks also store the data which differentiates one from the other just like distinguishing the one person from the other with the help of their names. Also, every block saves the special code which is known as a hash which enables us to recognize it. Basically, regardless of the fact that the credentials of certain transactions might appear the same but with the help of unique code, their difference can be recognized.
Moreover, the single block on the blockchain could store the information for up to 1 MB and on the basis of the particular size of the transactions, a single block has the capacity to store thousands of transactions under one head.
Right when a block stores the new information, it is straight away added to the blockchain, where, as its name illustrates, the blockchains is comprised of numerous blocks which are tied together. There are as much as four factors which must occur in order for a block to be added to the whole blockchain.
The specific transaction must happen which usually initiates as soon as the user makes an action like a purchasing process. After making payment through checkout, the transaction usually gets finalized.
Now when the transaction has happened, then comes the stage of its verification of authenticity. In the light of several public records of the data and information, the data storage sources like your local library or Wikipedia needs to be the administrator of assessment of new data entries. With the virtue of blockchain, the same function is levied to the network of computers which are hundreds and thousands in the numbers scattered all over the world. And after you are done making a purchase from online sources, this very network of millions of computers prompt to verify the happening of the transaction in the right way. This is when they verify the credentials of transactions like time, amount and users etc.
In the third stage, that every transaction has to be stored in a block and when the transactions are confirmed as authentic, the green signals are rendered to it. Amount of the transaction, digital sign along with the other essential information is stored in the block. This is where your transaction joins the other probable hundred thousands of similar transactions.
Similarly, the block must be labeled with a hash right when the entire of the block’s transactions are accurately authenticated. Also, the block is given the hash or title of the most recent block which is added to the entire blockchain. When the block is hashed, only then it could be added to the blockchain.
After the addition of new block to the blockchain, it is available for the view for laymen without any trouble. Just if you opt to view the Bitcoin’s blockchain, you will realize that you have the approach to the credentials of the transaction other than its data, and sources as well.
Basically, a cryptocurrency is a virtual or digital currency which utilizes the sophisticated cryptography technology for security which makes it difficult to be surpassed due to compact safety. Most of the cryptocurrencies are regulated by the decentralized mechanisms which are relying on blockchain technology which is spread by a well-mannered network and sequence of computer networks. The most terrific benefit among many others is its purest and natural nature which means it is not authorized or issued by the central authority. That way, the cryptocurrency avoids any intervention or interference by the government or authorities towards the very currency. It is worthy to mention that the first blockchain based launched currency was Bitcoin which is equally famous even now due to its high value. Nowadays, there are a lot of cryptocurrencies with different functions and nature of performance are introduced in the market and even a few of them are only the carbon copy of Bitcoin.
Cryptocurrencies feature a well-regulated mechanism which enables the secure payments of online transactions which are graded and termed in the shape of virtual tokens to depict the ledger entries to the system. In the same way, the term “crypto” illustrates the aspect that several encoding techniques and cryptographic systems like elliptical curve encryption or hashing functions are used for the sophisticated level of security.
As previously mentioned, the first cryptocurrency which captured the public hype was Bitcoin and got launched back in 2009 by Satoshi Nakamoto. By the end of the current year 2019, according to estimates and studies, there are more than 17.5 million bitcoins circulating in the industry with the total market worth of whooping $115 billion despite the fact that the price of Bitcoin tends to have mixed shifts and trends over the times. Due to the epic triumph of Bitcoin, many competitor cryptocurrencies came into existence, termed as “altcoins” comprising of Litecoin, Peercoin, and Cardano etc. In the current world of tremendous technological advancement, there are actually thousands of cryptocurrencies with the market cap of more than $200 billion where the Bitcoin has more than a 50% share of the total worth.