Blockchain technology is like a blessing for crypto trading scenario. All the features you as a user of the bitcoin network get, such as decentralization, peer-to-peer transaction, transparency, and security, are the result of using this technology. Despite some disadvantages that Blockchain technology bears, it provides a wide range of advantages to the users of bitcoin.
Not only bitcoin but following the popularity growth of bitcoin and knowing the characteristics and utilization of this technology, so many other cryptocurrencies have been introduced. All use Blockchain technology as their base. Therefore, you can surely say that technology has a great attribute to the whole crypto world to flourish as much as we can see around us.
Here are all the details about what this technology offers us, how it works and its advantages. If you are a regular crypto trader, it is important to properly understand every nook and corner of the crypto world, especially bitcoin.
What is a Blockchain?
These are digital ledgers where the transactional data within the bitcoin network are recorded. The whole Blockchain is a distributed online storage or ledger. Every time a transaction happens, it is stored in the blocks, and a new block is created. Thus the Blockchain is expanding. It is like a never-ending process; therefore the bitcoin network is an open network of whoever can be a part.
How does Blockchain technology work?
Blockchain technology is a continuous networking process connecting people and storing their transactional data. The data storage system is interesting; this is how the blocks are being created, and the Blockchain gets enlarged. The process is known as mining which is also known for creating new bitcoins. These are the steps of how the process works-
- When you make a transaction, the transactional data with all the information in it is broadcasted in each and every block of the Blockchain of the bitcoin network.
- Now the miners who do the mining job verify the transactional data. This verification process is mining, where they need to use computational power that consumes a large amount of energy.
- The miners solve a complex mathematical puzzle known as a hash puzzle. In the mining software, they are provided with a target hash number, a 64-digit hexadecimal number with a bunch of zeros in the beginning.
- The miners have two criteria to fulfill to successfully end the mining process. They have to come up with a number that is the same or closest smaller to the target hash number. And the miner who gets the right number first would win.
- After successful mining, the miner gets a new bitcoin as a reward for the job. And the transactional data gets verified. The process hardly takes 10 minutes.
- Once the data is verified, it is recorded permanently in the blocks with the date and time stamped.
- With this, a new block is opened that joins the existing Blockchain and carries this transactional data.
This is how Blockchain technology works.
Pros of Blockchain technology:
Blockchain technology has many attributes over the bitcoin network, which is why people are more toward this cryptocurrency to invest in. With the help of any reliable platform like https://bitiq.org/, you can also invest in this crypto and enjoy the underlined facilities of Blockchain technology.
- Blockchain technology is an equal distributed ledger system with no central regulation point. Therefore, the technology makes the bitcoin network decentralized, enabling people to control their own currency.
- It makes the bitcoin network open-sourced so that anybody can use it anywhere in the world at any time.
- The bitcoin network also offers direct fund transfer to its users without interruption of any third party, which is possible only for the technology.
- Blockchain technology makes the whole bitcoin network transparent by keeping the public’s data and also makes it secure. No one can change or delete any data because they are equally distributed in every block.
The bottom line
This is all about Blockchain technology, how it works, and its attributes toward the most demanded cryptocurrency, bitcoin. The information would help you understand the technology clearly and possibly make up your mind to invest in bitcoin and have a taste of this technology.