A Primer On Blockchain Technology
January 25, 2019 10:29 am
Cryptocurrencies and blockchain technologies are all the rage now. In this post, we are investigating the underlying technology that has made cryptocurrencies incredibly successful.
Blockchain is a technology that acts a digital record-keeping system that is created to speed up transactions while simultaneously lowering costs and offering heightened security. This removes the need for a third-party and allows the transactions to be carried out in a seamless manner.
Blockchain technology has opened up the path for cryptocurrencies which are ready to replace the ongoing payment system. Furthermore, the potential of blockchain technology has made way for decentralized applications (dApps).
The Blockchain process
- An individual or company initiates the transaction.
- Details are routed to a network of shared computers called nodes.
- The nodes verify the transaction and its authenticity.
- The transaction is added to other recent transactions to create a block of data.
- The new block is added to the others in the blockchain.
- The transaction is complete and immutable.
Although Bitcoin has garnered a lot of popularity, the real breakthrough lies in blockchain technology. It has the potential to revolutionize the way we conduct business. The elimination of a third-party from the equation has paved the way to secure and anonymous transactions. Furthermore, the fees that are usually associated with cross border payments are also removed. This means that the person gets the complete payment for their work.
If we break down financial transactions, they are simply entries in a ledger. Banks and other financial institutions have been traditionally responsible for maintaining these ledgers.