Blockchain has become a buzzword these days with the growing popularity of cryptocurrencies. So how does the blockchain work?
Cryptocurrencies run on blockchain technology, a type of database or digital ledger that records all transactions related to crypto coins. The technology gets its name from the fact that information is stored in a chain of blocks.
Blockchain technology records information to make it difficult or impossible to hack, alter or manipulate data stored on network-connected systems.
Digital records of all transactions are distributed across a network of computers on the same blockchain.
How Does It Work?
The record of all digital transactions made by the system is duplicated and shared by all computer systems operating on the same blockchain.
All transaction records in blockchain systems can be accessed anywhere. A irreversible timestamp is created for each transaction stored in a block.
Blockchain is a decentralized database that is often managed by multiple users. This is known as Distributed Ledger Technology.
How secure is blockchain technology?
Blockchain technology provides greater data security and transparency. All users of the blockchain network can access information related to all transactions.
Blockchain technology is decentralized, which means that an individual cannot have ownership of the data or prevent other users from accessing the same.
In a decentralized blockchain, many users enjoy free access to all data available on the network. It is almost impossible to hack or damage the information stored in the blockchain because hackers have to hack all the blocks in the entire network simultaneously.
How the blockchain powers cryptocurrencies
Blockchain technology is used to store data related to transactions for each cryptocurrency.
Every time a transaction in a cryptocurrency is made by an investor, blockchain technology stores the transaction history with a timestamp.
The blockchain platform also stores legal contracts, transcripts and product inventories of each cryptocurrency operating on the same network.