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What exactly is blockchain and its benefits?

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Blockchain explained

Blockchain is a distributed ledger.

The blockchain is an undeniably ingenious invention – the brainchild of a person or group known by the alias Satoshi Nakamoto. But since then, it has evolved into something more significant, and the main question every person is asking is: What is Blockchain?

By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Initially devised for the digital currency, Bitcoin (Buy Bitcoin), the tech community is now finding other potential uses for the technology.

Bitcoin has been called “digital gold” for a good reason. To date, the total value of the currency is close to $112 billion US. And blockchains can make other types of digital value. Like the internet (or your car), you don’t need to know how the blockchain works to use it. However, basic knowledge of this new technology shows why it’s considered revolutionary. So, we hope you enjoy this; what is Blockchain guide.

Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually anything of value.

Satoshi Nakamoto invented blockchain technology in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without needing a trusted authority or central server.

The bitcoin design has inspired other applications, and cryptocurrencies widely use blockchains readable by the public. Private blockchains have been proposed for business use. Some marketing of blockchains has been called “snake oil”.

A blockchain carries no transaction cost.

A given digital signature is unique and specific to one transaction; it can’t be re-used. As a result, the nature of Blockchain technology eliminates transaction fraud (such as double spending) by design.

With conventional banking, fraudsters often take advantage of the fact that their transactions are anonymous. They can make duplicate copies of receipts or go on spending sprees using stolen credit card numbers. But with Blockchain technology, the ledger is public and shared among all nodes in the network. Digital signatures are used to confirm every transaction that occurs in the network. The security of these signatures depends on practical encryption algorithms and private keys stored offline, away from hackers’ malicious reach.

The blockchain is secure by design and is an example of a distributed computing system with high Byzantine fault tolerance.

Blockchains are secure by design and an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain.

This makes blockchains potentially suitable for recording events, medical records, and other records management activities, such as identity management. More generally, blockchain technology is helpful in areas where the reliability of recorded information is significant.

The technology in Bitcoin could have far-reaching applications, including a decentralized Internet.

Bitcoin’s technology could have far-reaching applications, including a decentralized Internet.

Blockchain’s potential isn’t limited to financial transactions. Think of blockchain as a distributed database that maintains a shared list of records, called blocks. Each block contains a timestamp and links to a previous block—that’s why it’s called a “chain.” Cryptography ensures that each block is tied irrevocably to the one before it and the one after it, creating a permanent and unalterable record—a “distributed ledger” in blockchain parlance.

These ledgers are not just secure from tampering; they’re also democratic (or even anarchic). They’re open for anyone to view or edit, but they can’t be erased once information is entered into the ledger. Because data is maintained across so many computers at once, there’s no single point of failure. For instance, you could use blockchain to store data from your smartphone so that if you lose your phone, you won’t lose all your photos as well. Or imagine if every time you updated an Excel spreadsheet at work, it automatically copied itself onto thousands of other computers around the world in real-time (and without any chance of erasing old versions or having someone hack into them). Companies like Microsoft are experimenting with using blockchain for cloud storage.

Blockchain technology is like the internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain cannot be controlled by any single entity and has no single point of failure.

The internet was often described as a “network of networks during its early days.” Likewise, blockchain technology has a similar potential to be a “network of blockchains” in which individual blockchains can interact with one another peer-to-peer.

It’s also fast and scalable.

You can run a database on multiple computers, and that’s what blockchain is. The more computers you have, the faster the database can read and write information. As a result, it can scale up as demand increases — unlike bitcoin, which has suffered long transaction times as its popularity has grown. That’s why banks are excited about blockchain: it has the potential to speed up their operations and save them billions of dollars in infrastructure costs.

By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet.

By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Initially devised for the digital currency, Bitcoin, the tech community is now finding other potential uses for the technology.

Initially devised for the digital currency Bitcoin, blockchains – which use what’s known as distributed ledger technology (DLT) – are appearing in a variety of commercial applications today.

You may have heard of Bitcoin. It is a peer-to-peer electronic currency system that uses a proof-of-work algorithm to verify transactions and prevent double-spending (hence the network is resistant to hacking and attack). Bitcoin was invented in 2008 by an anonymous programmer, or group of programmers, with the pseudonym Satoshi Nakamoto. He created the idea behind this new form of money to allow people to buy things easily online without paying any transaction fees while keeping all their personal information secure.

Currently, one Bitcoin is worth around $300 (£188), meaning you can now purchase about three ounces (90g) of gold with just 0.0011 Bitcoins – a much better deal than most banks would offer you. As well as being traded digitally through your computer or smartphone, it can also be stored in “digital wallets” on these devices – making it easier for people to keep their Bitcoin safe from hackers and other online threats. You can even send Bitcoins back and forth via email if you want (so long as one person has some and wants to give some away).

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