It won’t be wrong to say that Bitcoin and other new digital currencies have been making a lot of news in the recent past. After all, bitcoin is the only digital currency that has surpassed a billion-dollar valuation and is still growing. This is also led to a growing interest in the technology known as blockchain. Bitcoin is an application developed on this platform but blockchain has a lot more uses than just Bitcoin. In the article below, you will find several things that will help you know a lot more about blockchain.
What Is a Blockchain?
To understand blockchain, you first need to understand that Bitcoin is not the first digital currency. However, it is the first digital currency that successfully solved a lot of problems thanks to the inventor of the special currency who likes to be known as Satoshi Nakamoto. One of the biggest problems with digital currencies is that it’s not easy to prevent what is called double spend. In other words, without a central registry, it is close to impossible to know whether a particular digital currency is being spent on multiple locations at the same time. This is where the blockchain technology comes in and solves the problem of what is known as double spend.
In simple terms, a blockchain may be defined as a digital ledger of records that are arranged in batches known as blocks and where public cryptography is used for linking these blocks together. Blockchain keeps track of all the transactions that take place on the Bitcoin network. In other words, it is kind of a database where cryptographic validation is used for linking different batches together and this database is stored on hundreds of thousands of computers spread all across the world. The unique thing about this technology is that it is distributed which means it exists on multiple computers and there is no central registry or location or a central body that manages this digital ledger.
Anybody can get a copy of this digital ledger, at any time, which means it is open to everyone and anyone who wants to maintain a copy of it. What makes this so interesting is that the block validation system. This system makes sure that everybody has the same copy and no one alone is able to tamper with the records. So, all the transactions on the Bitcoin network are reserved forever and all the new transactions are simply added to this digital ledger which means any particular address that has ever made a transaction will be there on the blockchain for eternity.
It is a permanent, transparent and independent distributed database that is shared by a community and coexists in several locations. However, it is also important to mention here that this type of independent database or mutual distributed ledger is not a new thing. In fact, several research papers have discussed the possibility of mutual distributed ledgers but before the blockchain came together, these distributed ledgers were regarded complicated.
Also, there was no technology that could verify the correctness of the distributed ledger. So, it can also be said that the inventor of bitcoin did not invent any new things. However, he brought a lot of existing technologies together to create a system that was able to solve the problem of double spend and allow the digital currency to be stored and spent without any issues.
As mentioned in the beginning, bitcoin is just one implementation of blockchain technology. This technology has a lot of different potential applications. In fact, some countries have also started experimenting with this technology to maintain their land records. A lot of financial institutions and other companies have patented a lot of applications based on this technology. Since this is a publicly distributed database, it can be used for maintaining a wide variety of records that can be accessed by anyone at any time with the help of simple applications.
Overall, blockchain is a disruptive technology that has solved the age-old problem of double spend and has given rise to several different applications. Many experts agree that this technology will be widely used to power a wide variety of functions in the modern society in the near future.