In the last ten years, there has been a real expansion of cryptocurrencies such as Ethereum, Litecoin or certainly the most famous bitcoin. The last-mentioned bitcoin is the creation of a group of people or one person (not officially known) under the name Satoshi Nakamoto. The market has seen a huge rise of bitcoin in recent years, which is the most dominant cryptocurrency today. However, the problem may be the inconsistency and large falls in the value of this currency. The falls are good in case currency is predicted to grow again because you can use it to buy a lot of bitcoins that will later increase in price.
Another great creation by Satoshi Nakamoto is blockchain technology that was originally intended for this cryptocurrency and to track and record all transactions with it that has ever happened. However, the application has expanded to other segments of the Internet. If you want to know more about blockchain technology, please continue reading.
What is the principle of blockchain technology?
The simplest we can explain is that a blockchain is a large group of data that cannot be changed or deleted and is managed by a group of computers that no one owns. This means that the data is extremely secure and interconnected. However, data is available to everyone and everyone is responsible for its own actions.
How does the process work? The answer is: quite simply but still extremely safe. Namely, in transactions with the aforementioned bitcoins, one person starts the whole process and creates a block. The next step is to confirm this created block after which it is added to the chain created on the network. The most interesting thing is that a huge number of millions of computers verify the first creation of a new block. It is also a well-known fact that in standard transactions, banks or other services charge for the transaction process. With blockchain, everything is completely free. In essence, any transfer of cryptocurrency or money to make, you won’t have to pay any commission fee to third parties or intermediaries.
The Three Pillars of Blockchain Technology
The last thing we want to educate you about is the so-called three pillars of blockchain technology. The first pillar involves decentralization. As you all know, a great example of a centralized system is a bank. All information about users and their money transfers and transactions are located on the servers. However, what would happen if all this information was lost and no one had access to it anymore. Pretty bad scenario. On the other hand, a decentralized blockchain technology system implies that important data is accessible to everyone on the network and everyone can see it.
The second pillar is transparency. But how is that possible when everything is secure and encrypted. Simply, during transactions, your name won’t be written anywhere, but something like codes, and so no one will know who is behind the transfer.
The third pillar implies immutability, which means that once entered data can no longer be modified or deleted. In that way, blockchain technology could have major applications in various business and transaction segments.
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