Bitcoin is going from strength to strength. Despite being in existence for a relatively short time, the cryptocurrency has risen exponentially in value and is now regarded by many as a solid investment. Blockchain technology, which underpins Bitcoin Up and other cryptocurrencies, has also garnered interest from various sectors (finance, healthcare, retail etc.) due to its apparent security features when storing data. During this digital age when cybercrime seems rife it’s no surprise that online stores are looking for secure methods of protecting their products and keeping sensitive information safe. But what exactly is blockchain technology and how does it work? Let’s start at the beginning…

What Is Blockchain?

The term ‘blockchain’ actually refers to two different things. On the one hand, it can be used as a synonym for digital ledger technology (DLT). DLT is essentially a way of storing vast amounts of data securely and in an open format. It’s designed so that records are immutable, meaning once data has been written into the chain it cannot be altered or tampered with. The appeal of blockchain lies in its security capabilities rather than anything else.

On the other hand, ‘blockchain’ is also the name given to the first cryptocurrency distributed using this type of technology – Bitcoin . Although Bitcoin has existed since 2009, blockchain was only released as open-source software four years later in 2013. Since then there have been several new cryptocurrencies created using some form of DLT.

How Does Blockchain Work?

The principle of blockchain technology is actually relatively simple to understand. Before any data is written to the chain it first needs to be agreed upon by consensus between all parties involved in the transaction . Once consensus has been reached, ‘blocks’ of information are added which contain identifying details regarding the subjects involved in the exchange. Each block on the chain contains a cryptographic hash created using algorithms which are unique to that block. The actual content being stored within each record is irrelevant – what matters is that each block references its previous one with an unbroken, sequential code.

What Are Blocks?

Blocks are then added to the chain by miners . A new block is mined every ten minutes. This ensures that there’s a definitive time frame for when each transaction takes place. It also makes it difficult for information to be inserted or removed from the chain without being identified or detected. If someone wanted to edit records on the blockchain they would have to do so with every single subsequent block too, not just one. The more blocks that are recorded on top of it, the harder (and costlier) this becomes.  

The content of each block varies depending on what information needs to be stored and how large it needs to be. For instance, transactions need to include identifying data sender/recipient addresses and internal codes for where the money should be transferred to. Blocks can also contain metadata such as timestamps, permissions, and even other transactions. In short, nearly any type of data can be stored on the blockchain.

How Secure Is Blockchain Technology?

Blockchain’s reliance on cryptography means it is considered a highly secure method of data storage. Rather than relying on a centralized system that can potentially be hacked or manipulated by a single authority, blockchain uses a decentralized network that stores blocks across all computers connected to it. This approach does make it more difficult to hack or corrupt records since you’d need to get access to every computer in order for that to succeed.

What is bitcoin ?

Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Bitcoin can also be held as an investment. According to research produced by a Cambridge University major in eSports and gaming culture, it is estimated that in 2017 there are 2.2 million unique users using a cryptocurrency wallet, most of them using bitcoin.

Conclusion

Blockchain is a technology that makes it difficult for records to be edited without being detected. With this in mind, there are several different types of blockchains that have been created over the years. One type of blockchain is Bitcoin and another example might be Ethereum or NEO. These digital currencies can also be seen as an investment because they’ve appreciated so much in value lately. The important thing to remember about these cryptocurrencies is that they’re not just volatile assets but rather potential opportunities for growth if you understand what’s going on with them from day to day!