What is blockchain technology?
Blockchain is peer-to-peer software technology that protects the integrity of a digital piece of information. it was invented to create the alternative currency Bitcoin, but may be used for other crypto-currencies on-line signature services voting systems, and many other applications.
In this blogPost we explain how it works and what makes it special Everyone uses paper money. When you get a $10 bill you trust that it's not fake. if instead someone sent you an email saying: here is $10 you probably wouldn't trust it. But when we transfer money use an ATM or pay with the deposit card that's pretty much exactly what we do.We're sending money in a digital message.
To make sure no one's cheating or sending money they don't have, these "messages" go through a few trusted banks that keep a record of everything.They know how much money everyone has and deduct it properly for every transaction. But this becomes expensive when there's a million transactions around the world, every minute. The economist estimates that banks charged us more than $1.7 trillion to process these payments in 2014. That's about 2 percent of the entire world economy!
With Blockchain we can save a lot of this cost, because it lets us send money just like sending an email. Instead of sending a lot of payment information through a few servers, Blockchain uses thousands of personal computers on the Internet. All transactions are copied and cross check between every computer in a systemwide accounting book called The Ledger, which becomes very safe at scale. Blockchain doesn't just allow us to create safe money online, it lets us protect any piece of digital information. This could be online identity cards, voter ballots, contracts and many other legal instruments, bringing bureaucracy into the 21st century.
What is Cryptocurrency How it's work?
There’s Bitcoin,There’s Litecoin,There’s Ethereum and many crypto So just what is cryptocurrency, and how does it work? Essentially, it’s digital money that’s bought and sold online. There’s no bills or coins. It’s not based on another asset like gold.And it doesn’t go through traditional financial institutions like banks.Instead, these currencies operate in a completely decentralized system that uses so-called blockchain technology to track transactions.
To see how this works, let’s look at how you’d buy something with cryptocurrency. Say that Alice wants to buy a bike from Dan using Bitcoin, her cryptocurrency of choice. Alice begins by logging into her Bitcoin wallet with a private key, a unique combination of letters and numbers.With a traditional financial transaction, the exchanges get sent to banks on each side who record the money being subtracted from one account and added to another.
But remember, in this scenario, there are no banks or middlemen. Instead, Alice’s transaction is shared with everyone in the Bitcoin network. These networked computers add Alice’s transaction to a shared list of recent transactions, known as a block. Every 10 minutes, the newest block of transactions is added on, or chained, to all the previous blocks.That’s how you get a blockchain. To ensure that each block of transactions on the chain is verified, a subset of Bitcoin’s network joins a race to solve a difficult math puzzle.
And if they solve it first, their record of the block of transactions becomes the official record. They’re rewarded with Bitcoins of their own, and the network gets a new block on the chain. This entire process is known as mining. But instead of chipping away at rock, you’re solving complex puzzles. The fact that many computers are competing to verify a block ensures that no single computer can monopolize the Bitcoin market. To ensure the competition stays fair and evenly timed, the puzzle becomes harder when more computers join in.
The Bitcoin protocol says mining will continue until there are 21 million Bitcoins in existence. That’s set to happen around 2140 — if Bitcoin lasts that long.
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