What is Block chain and how does it works?AHBComments off.
What is Block chain?
The block chain is an undeniable and genius invention. Block chain has created a new type of internet by allowing digital information to be distributed but not copied. This technology is developed for the digital currency to do different types of transactions securely.
The bitcoin has been called a digital gold, and its total value is close 9$ billion US. Block chain also makes other type of digital values. It is a biggest buzzwords technology right now. The major application of this technology was bitcoin and it was released in 2009. Bitcoin is basically a crypto-currency and block chain is the technology that underpins it. Crypto-currency is referred to the digital coin that runs on a block chain technology.
Understanding how the block chain works with btc will allow us to that how the technology is transferred to many real world use cases. Bitcoin is the brain child of a mysterious person or a group of persons known as Satoshi Nakamoto. Their vision was laid out in 2009, and it was named as Bitcoin and it is a peer to peer electronic cash system.
The bitcoin block chain:
Behind every bitcoin, block chain is a ledger of every transaction that takes place. It cannot be tampered with or change d retrospectively. Block chain makes bitcoin all transactions safe and secure than the current systems. Here are the some facts about bitcoin:
1: Bitcoin is not issued by any central authority.
2: It has the limit of 21 million and currently 17 million are in circulation.
The first transaction using bitcoin is believed to be done by programmer named Laszlo who spent 10k bitcoin on 2 pizzas in 2010, but the identity of the creator is still unknown.
The block chain is decentralized, meaning it is not controlled by one person or an organization. While all other traditional currencies are issued by the central bank, bitcoins has no central authority. It is rather maintained by the group of persons and they are called miners. These miners are called nodes on the network. People are running purpose build computers that are actually competing to solve complex mathematical issues, in order to makes transactions go through smoothly.
Many people are making the bitcoin transactions, each transaction originates from a wallet which has a private key and it works as a digital signature. It provides the mathematical proof that the transaction has come from the owner of the wallet.
Now consider lot of transactions are taking place across the world. These individual transactions are grouped into a block, organized by strict rules. These blocks are send out to the bitcoin network, which are made up of people running high powered computers. The transactions are validated by trying to solve complex mathematical puzzles, and the winner receives an award in bitcoin.
The validated block is added to the previous block, thus creating a chain of blocks called block chain.