Today we carry on with our crash course for beginners in the cryptocurrency market. We will tell about technology that underlies almost every cryptocurrency and about the features of this technology.
Blockchain technology differs from a traditional data base by the principle of organizing information. Classical data base is hosted on servers specially designed for it and these servers are controlled by organization that owns this data base. Blockchain is not controlled by a person or organization and its security is ensured by its distributed architecture.
Block technology allows different sides not having trust for each other to exchange data without the central server. Processing and storage of transactions is carried out by all users at once. After adding data to the network by one of the participants, all other nodes of the network are used to check and confirm the correctness of these changes. In a decentralized blockchain the information is stored on all computers of all users at once, and not on a single server, which protects the network from hacking and data spoofing.
The more network participants and nodes, the more data copies. To change data in this situation one need to hack every single node in the network and modify all data simultaneously. Every block in a chain has a certain block of data, and when this block gets filled, the data gets encrypted and written in the network forever. To change data in any transaction, hackers would need not only the current block, but also all the next ones which is not only practically impossible, but also too expensive.
Adding blocks is carried out using cryptographic methods of protection and this guarantees the reliability of data without a universal processing center. However, constantly growing size of the chain of blocks can make its storage and synchronizing more difficult.
If data that is relevant only for the current time, is recorded in the usual database, the blockchain stores operations for the entire history of its existence. The system is designed in such a way that all transactions remain unchanged - they cannot be deleted.
Given its characteristics, the blockchain technology offers the ability to create enterprises and carry out operations that are quite flexible and safe. Today, the blockchain is beginning to be actively introduced into banking systems, property registration systems and various state registries, supply chain management, and in such areas as digital identity, energy, voting, games, the Internet of things and other.
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Would you like to know more about this technology? Maybe you’ve got some questions about blockchain? Please ask in the comments and we will find the answers together.