April 25th, 2018
Blockchain technology is the center of attention, at the moment and it’s easy to see why. Since digital currency surges were seen last year, this underlying technology is gaining the attention of many around the world. Naturally, digital currency users have many questions about how it operates, where blockchain is stored, etc.
Digital currencies are all made out of blockchain; it’s the underlying technology behind all cryptocurrencies. The blockchain is a huge database storing all information. Imagine it a big Excel spreadsheet where entries can be made by all users and it is instantly updated on all systems. Blockchain stores all details about digital currency transactions ever made. This includes:
Here are different Digital currency addresses or account numbers. We are assuming each address had 5 BTC to begin with. The best thing about this concept is that anyone within the network can calculate the balance just by reading transactions:
1FJJgwoa47aBpv84euSLreFmJPwBdZy has 5-0.01 = 4.99 BTC
35cVF6hZwXF33yS3jhoQRt1gzZhxM has 5–4.9 = 0.01 BTC
1JN95wW66Pone6n4f1giFZNqCu64 has 5–1.245=4.875 BTC
1737a36vF46rGXQPGLMJTcWsw2y has 5+0.01+4.9=9.9 BTC
1KJDDF54pH65qicuyCK74Af7Wtpp has 5+1.245=5.12 BTC
What’s more interesting, is that any individual can add a new transaction to the blockchain and that is how money is transferred. But once the transaction is written in the blockchain, no one can erase or edit it.
That’s all about Blockchain. It’s a simple and transparent system that is now being implemented by many businesses around the world.
The first answer would be no, it’s not as simple to use as Bitcoin. Anyone eager to see real life blockchain transactions can visualize in it’s the explorer. Go through all the transactions and start relating each transaction, you will get an idea of the whole system.
Apart from that, there are lots of other technical ideas associated with the concept such as blocks, smart contracts, mining, and many more.
The blockchain is a decentralized concept which is completely different from traditional systems. There is no single authority or organization taking control of the system, totally opposite to centralized system. Blockchains are stored in computers within the system, also named as nodes. Each node will have a copy of the transaction made. The blockchain system is similar to a spreadsheet where it is constantly updated among users after a new entry. With every new transaction, this spreadsheet is updated and stored in nodes.
Here is an example to understand the concept:
Suppose Billy Jean sends Bitcoin to Sally. Billy Jean creates the transaction and sends it out to all computers it knows running the blockchain system, also called nodes. Billy Jean’s digital wallet has the entire list of nodes so it doesn’t have to worry about knowing every user or node. This whole process is transparent to Billy Jean.
Each node has broadcasted the message that Billy Jean is sending Bitcoin to Sally. Each node transmits this message to its list of other nodes and they, in turn, forwards it to other till the whole network is aware of this transaction. Some of the nodes in the system are miners and they have the task to verify the transaction.
The time which it takes to propagate through the whole network is around 15 to 20 seconds. This time can vary every day and is based on various factors.
This is how transactions takes place in blockchain technology and it is stored in every node within the network. This technology is unique and it comes with a wide range of features, which makes it so popular. Apart from financial transactions, blockchain technology has potential to excel in many different fields. Top business firms have already shown interest in this new technology and they are eager to implement it to the current system. Blockchain technology is a modern day revolution that will simplify businesses in all possible ways.