April 24th, 2018
Bitcoin is a new invention that has been making news everywhere because of its recent price surge. This price surge is garnering the attention of people everywhere and they are eager to invest in it. Experts, however, claim that it is the underlying technology that is creating this positive feedback. Blockchain technology is a unique innovation known to be decentralized, cost-efficient, and most importantly, avoids the need for a middleman.
Every digital currency user needs to understand both Bitcoin and Blockchain technologies before using them. To use digital currencies you need to install or a use digital wallet, that you can use to store, receive or send Bitcoins. Digital wallets can be accessed from your mobile phone or computer; they will generate Bitcoin addresses when you need them. Bitcoin addresses can be shared with friends so that you can get paid or vice versa. This concept is similar to how email functions; the only difference here is that Bitcoin addresses are used only one time.
The blockchain is a distributed public ledger where the complete Bitcoin network is dependent. In the blockchain, all confirmed transactions are added. In this way, all Bitcoin wallets calculate the spendable balance-new transactions can also be verified. The chronological order and integrity of the blockchain that are imposed, use cryptography.
A blockchain transaction is basically transferring the value between two digital currency wallets, the one that is included in the blockchain. Digital wallets keep your data secure and are also called a private key, it’s used to sign transactions and provide proof of the transaction. This digital signature also prevents any transaction from being altered by individuals once it has been issued. All digital transactions are broadcasted on the network and will start getting confirmed by the network in 10 minutes. This process is called “mining”.
Mining as the name suggests, is bringing digital currencies into the light. It is a distributed system that is used to confirm transactions by adding it in the blockchain. Mining ensures chronological order, protects the neutrality of the network and also allows different nodes or computers in the network to agree on transactions. To be confirmed, all transactions must be packed in the block which follows strict cryptographic rules. All these rules prevent previous blocks being modified; doing so may invalidate all following blocks.
This is a very short and simple summary of how the whole process works. Bitcoin is a digital currency that is based on blockchain technology. Often users consider these terms to be synonymous, but in reality, they are vastly different.
Blockchain technology is undeniably a new innovation that is taking the world by storm. Businesses and companies around the world are showing interest in this new technology, it can bring a much-needed change all over, thereby making the system fast, safe and cost-efficient.
The blockchain is now considered to be a new type of internet based on which many new technologies or ideas can grow. Originally Blockchain technology was devised for digital currencies, but now the tech community is finding huge potential in this new technology. Top leaders from different sectors are investing a huge amount of money to fund the research for the use of blockchain in many respective fields.
Bitcoin has been called “digital gold” and there is a reason for it. The recent price surge, clearly shows the potential of Bitcoin and experts believe that its value will keep breaking records.