Bitcoin needs no introduction as it has been around for quite a time. A lot of discussions and chit-chats happened regarding the future and progress of Bitcoin’s existence.
Many people still are unaware of the term and what exactly Bitcoin is.
Well, Bitcoin is the maiden decentralized peer-to-peer public ledger often referred to as cryptocurrency and considered as the future of financial transactions.
It was developed by a person named Satoshi Nakamoto from Japan.
So, let’s understand everything about Bitcoin, including the technology behind it, how it works, and other important things.
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Blockchain – The Technology Behind Bitcoin
Bitcoin was developed with a technology known as the blockchain. All cryptocurrencies are developed using the blockchain.
Blockchain is nothing but a list of records that are secure, public, and decentralized.
It is used to run different types of transactions, including selling, buying, and trading with the digital.
When you buy a bitcoin, another user verifies and authenticates the transaction and then added to the ledger. The same happens at the time of selling bitcoins.
Unlike the traditional ways of transactions, bitcoin is incorruptible and inviolable. That means, once a transaction is registered, it will stay throughout life and cannot be deleted.
How Blockchain Technology Works?
It stores all the previous transaction history from the genesis block (first block of the Bitcoin blockchain) to the current one.
Each user has the access the blockchain copy so that they can verify the transactions anytime.
Miners are authorized to create new blocks and compute a PoW (Proof-of-Work) for its validity. They also group the transactions in the block.
Further, this block is then added to the blockchain and publicize its transactions. Each block is interlinked with the previous block by referring to a hash.
A hash function receives the input data and sends a fixed-length output data. This output further compared with a digital print to identify and verify the input data.
Bitcoin works on the longest chain rule, which means its the main chain. Also, if two miners mine a block parallelly, then both populate it to the public and visible to other users.
There are many softwares available in the market for bitcoin such as bitqt software .
How Safe Is Blockchain Technology?
If we talk about the safety of blockchain technology, let’s understand this with a simple example.
Let’s say; there are a vault and two people holding two keys (public and private keys) of the safe. The vault can be opened if both of them agree to use their keys to open the safe.
Blockchain works on the same principle, which makes sure the security of the digital identity.
Sender and receiver both possess a combination of cryptocurrency keys (private and public). It can be said it’s more like a digital signature or agreement for the ownership.
This scenario makes the blockchain secure more than any other technology when it comes to digital transactions.
How Are Blockchain Transactions Authenticated and Get Approval?
Now that we are aware of what is blockchain and how it works let’s understand how transactions are authenticated and get approvals in the cryptocurrency market.
It all happens because of the distributed network. The distributed network makes sure through a set of mathematical operations that transactions are legal, verified, and has the real cryptocurrency keys.
Blockchain technologies rely on the size of the network because it is one of the significant elements for the security of blockchain transactions.
The bitcoin blockchain is continuously growing in terms of capacity and numeric calculations. It covers an approximate region of 3,500,000 TH/s.
This number is almost equivalent to over ten thousand business websites of the largest banks in the world.
It requires a huge amount of power supply to run these numbers.
Cryptocurrency investors and miners use their own computers and powers to contribute to the blockchain and bitcoin network. Apart from the profit, they did it for the public benefit.
It is very well maintained and managed that there is no chance of the same Bitcoin to be used in different transactions parallelly either by mistake or intentionally.
Each and every transaction on the computers area properly and securely validated and approved.
Final Words
Bitcoin and blockchain technology is a topic of controversy since the arrival. But the fact cannot be denied that it is revolutionary, more secure, and the easiest way for financial transactions digitally.
It’s still in the development stages and still growing. More and more contributions and developments are yet to appear.
Also, there are thousands of cryptocurrencies already developed from the blockchain technology which opened doors for a completely new trading system.
We can only expect better and better from the technology.
Also, apart from the cryptocurrency, it’s also getting used in other fields, including smart contracts, digital assets, energy supply, electoral rolls, land registration, goods and services billing, and supply chain management.
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