The idea of blockchain is not unknown to those people who delve into cryptocurrency by any means. It has become a vital part of the crypto world and expects to reach worth $20 billion in the next few years. Blockchain technology allows you to transfer your funds anywhere in the world within a matter of seconds without involving an intermediary. It eliminates the banking system, transaction fees, transfer slowdowns, and non-transparency.
Blockchain technology is a concept of banking in real-time across the globe, with the middleman eliminated. Besides transferring funds in seconds, blockchain technology may soon create specific digital IDs requiring authentication to help get rid of identity theft.
The invention of Blockchain Technology
Satoshi Nakamoto is the name of the individual or group of individuals who invented blockchain technology in 2008. The same individual or group is known for the founding of bitcoin in 2009.
Nakamoto developed a blockchain database, known as the basic building block of the technology. It helped eliminate the double-spending of the cryptocurrency through the use of a peer-to-peer network.
Are Bitcoin and Blockchain the Same?
Blockchain and bitcoin are entirely two different things, though they have a close relation. Since blockchain technology presents bitcoin as its first example, almost everyone misunderstood the terms and started using them interchangeably.
Bitcoin is an unregulated cryptocurrency, which is only one type of virtual currency. There are many other digital currencies, such as Ethereum, Litecoin, Dogecoin, and Ripple. Cryptocurrency works separately from traditional currency and its regulations or controls. It has nothing to do with the third-party payment system. Every bitcoin transaction goes through a digital ledger that is viewable by the public but remains anonymous. Most investors still need to contact a cryptocurrency exchange to buy any cryptocurrency, including bitcoin.
Blockchain technology refers to a technology that allows bitcoins to move about the internet. It may look like a block of information or records, known as blocks. Every block comprises a cryptographic hash of a timestamp, the former block, and transaction records. Blocks linked together using cryptography forms a chain and serves as the foundation to hold the bitcoin transaction ledger.
Bitcoins and Blockchain
Every bitcoin transaction appears as a ledger on a blockchain with no central authority monitoring or ruling. Bitcoin users need to agree with the validity of blockchain ahead of time. Once a user completes their bitcoin transaction, miners start the mining process that aims to validate the transaction, known as a proof of work.
Crypto mining is to solve a complicated mathematical algorithm or puzzle. Anyone can mine cryptocurrency if they use the right computer or the hardware needed to execute the process. The first miner who solves the puzzle reaches the next block on the blockchain and gets some bitcoins as a reward. Others can get into the blockchain after achieving this. However, no miner or user can change or corrupt the transaction added to the blockchain.
The blockchain employs a public key infrastructure, known as cryptography, to protect against draconian attempts to access the records or alter them. Instead of using passwords, a blockchain-based authentication system uses efficient identification verification with public-key cryptography-based digital signatures.
Like any other technology, the blockchain is not 100 percent protected from shady hackers. However, it is a hard-to-crack puzzle, which adds charisma to the safety of bitcoin transactions. According to the World Economic Forum, to alter a chain in the blockchain, one needs to take control of more than half of the computer systems in the same distributed ledger and change every transactional record within a transitory time. It can be equal to ten minutes for bitcoins. It is something impossible and has never happened so far.