Blockchain: the backbone of cryptocurrency

Over the past decade, every investor or follower of the financial sector has probably heard the word 'blockchain' concerning bitcoin; essentially the technology that keeps Bitcoin records. However, that is not all there is about blockchain, it’s just the tip of the iceberg.

Blockchain is quite complex for even people with experience in the financial sector, because of the application of technology to its use. To fully grasp what blockchain is, one must first understand the principles of how a database operates. In technological terms, a database is a group of information that is kept electronically on a computer.

The information or data that is stored is arranged and structured in such a way to ensure ease of locating particular bits of data that may be required. This may seem like the same operations as is used in a spreadsheet. However, a spreadsheet is streamlined to be used and accessed by one person or a minute group of people. A database on the other hand encompasses large expanses of data that can be assessed and changed by a large number of people provided they have the required access.

The data used here are kept on servers; which are made up of a collection of powerful computers to store large amounts of data and give access whenever required. As is expected from the large storage capacity required, these databases are usually owned by corporations and have a specific individual manager which has extensive access to all the branches. The need to understand the concept of a database is required because of its application and similarity to that of blockchain.

Blockchain, just like a database, is a collection of data or can collect data but in groups, which is in opposition to individual databases. The way it operates is that the data are filled collectively in blocks, as such, when one block’s capacity is full, it gets attached to the previous block while a new block is being filled up.

This is what literally makes up the name ”Blockchain”. As a result, new platforms in the food industry are integrating its use. There are certain things that blockchain is specifically known for bringing into the market. Firstly, decentralization. The best way to understand this is by how it is being implemented in the bitcoin space. Blockchain is the storage mode used for every Bitcoin transaction that has ever been made in history.

In essence, all the computers used in making these transactions are connected by the Bitcoin data they either sent or received, making it into a collection of interconnected computers by different users all over the world. Because of this, if one party tried to alter the record of transactions, all the other node parts would cross-check each other and easily locate the node with the problem. This brings up the second thing blockchain brings into the market; Transparency.

Bitcoin’s decentralization makes it so that transactions carried out can be viewed by parties trading using platforms like Bitcoin code app. These transactions can also be viewed live by individuals with no transactional stakes at all via blockchain explorers. This implies that Bitcoin can be tracked through this live streaming means. For an illustration, imagine a transaction is going on and somebody hacks into the transaction and steals the bitcoin being traded. Naturally, the hacker will remain unknown, the Bitcoin, however, can be followed to its last stop. This brings up the last part of Blockchain’s advantages; Security.

Although being accessible by a large number of people at the same time, the blockchain system is extremely secure. As transactions are being recorded and stored into blocks, these past transactions can not be edited because there are specific time stamps and each block has its hash. A hash is a code created by converting digital data into strings of numbers. This makes it such that any alterations in the system have to be collectively carried out by a large group of agreeing parties.

Blockchain is still relatively in its early days as its implementation followed the discovery of Bitcoin and other cryptocurrencies. However, its application is extensive as it could serve the banking sector, Health care records, property contracts, supply chain, and several other aspects of the society that require seamless data storing methods.