Introduction to Blockchain

Blockchain is one of the buzz words in the cryptocurrency community. Only a handful of people understand what the technology is, or its connection to digital currency.

This article will guide you through the technology behind cryptocurrencies and help you understand what blockchain is all about.

What is Blockchain?

A blockchain is simply a distributed database. This database contains a record of all executed digital events or transactions shared among the computers on the blockchain network. Each transaction must be verified by the larger percentage of the participants on the blockchain network before their addition to the blockchain.

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Blockchain technology is a multipurpose distributed software that is commonly used as a means of exchange. It allows assets to be transferred securely without the input of an intermediary. It also functions as a digital ledger for crypto transactions.

Thus, the technology comes in handy for exchanging units of values ​​such as titles, currencies, and votes digitally. They can be stored, tokenized, and exchanged on a network built on the blockchain technology. It also offers businesses a more efficient and faster means of processing orders. Thus, they can receive, transmit, and track their orders without the fear of losing their data to cyberattacks, thanks to the security features incorporated in blockchains.

This technology is the foundation for cryptocurrencies and is gradually finding ways into regulated industries. We have seen many industries leverage the power and security features of blockchain technology for their operations, which helps eliminate or reduce daunting challenges of traditional modes of operation.

History of Blockchain

Blockchain technology gained immense popularity with the release of Bitcoin in 2009. It is a peer-to-peer electronic cash system that highlights the true functionalities of a blockchain network. It is secure and decentralized, which implies that no central authority or group controls it.

How Blockchain Technology Works

Distributed ledgers and nodes are the driving forces behind the operations of blockchain technology. What are these?


The blockchain network is a connection formed by several computers. Each of the connected computers is referred to as a node. When a node is connected to the blockchain, the blockchain's data will be duplicated, and a copy is downloaded onto the system of the node so that it can sync with the newest block of data added to the Blockchain. The nodes work together to ensure the blockchain's security by verifying transactions before they are recorded on the blockchain.

Distributed Ledgers

Blockchain's data is not stored on a physical system or server. Instead, they are stored on distributed ledgers or databases on the blockchain. A distributed ledger is a shared database for information storage in a blockchain. The database is synchronized across institutions, sites, and geographies, thereby enhancing its security. Since everyone on the blockchain network can access the ledger simultaneously, it is difficult for anyone to alter or manipulate its content, thus becoming one of the fundamental factors behind its top-notch security.

Advantages of Blockchain Technology

Cost-Effective: The absence of third-party verification is a cost-cutting mechanism. With the elimination of intermediaries, the cost of carrying out operations or transactions on the network is considerably reduced.

Less Time Consuming: Operations performed on the blockchain are faster, thanks to the absence of third parties or central authority that may prolong such operations. This explains why transactions are faster compared with transactions through traditional platforms.

Enhanced security: The data stored on the Blockchain cannot be tampered with by anyone as the data is stored on millions of computers on the network. Hence, the system is well secured against fraud and cybercrimes.

Closing Line

Since its invention over a decade ago, blockchain technology has gained immense popularity and acceptance thanks to the numerous benefits of using the technology, and it will likely continue to evolve to bring more benefits.

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