The distributed digital ledger technology known as blockchain technology has the capacity to eliminate high amounts of record keeping. Blockchain is considered as a data structure with number of blocks connected to each other, they are either hashed or encoded blocks of transaction. Now-a-days the blockchain technology is being considered as the backbone of the transactions by allowing the digital information to be distributed instead of getting copied and is being used in many industries. Blockchain is an electronic ledger which follows the principle of write once and append many times.
Blockchain technology is the worlds leading software dealing with digital assets or transactions. As we know the blockchain as the distributed ledger used to record or store the transactions involved in the usage of cryptocurrency, the transactions once entered into the blockchain can’t be tampered with leading to the prohibition of double spending, this can be considered as an added feature of the blockchain technology. All the authentication requirements of blockchain are fulfilled using a private key of Cryptography. Blockchain represents a new example or model for the way of information being shared.
Blockchain is often considered to have prospective to create new foundations for social and economic systems. Mining even prevents individuals or users from adding blocks in the blockchain and thus no user can alter the blockchain and control the transactions or data of the blockchain and roll back their own spends often known as double spending.
Blockchain technology lives in a state of consensus, all the transactions of the blockchain are made directly between the users without the interference of central authority. The blockchain consists of the whole information regarding all bitcoin user addresses and their transactions right from the genesis block to the most recently completed or used block. The blockchain network database is shared by all the nodes or blocks taking part in a system based on the bitcoin protocol.
There’s no need of an administrator for blockchain instead the users itself are the administrators, blockchain ledgers can be managed autonomously to exchange information between different parties.
Blockchains are further classified into three types as public, private and consortium blockchain. Each and every blockchain has its own features and specifications.
A public blockchain has no access restrictions and any person with an internet connection can perform transaction and can even become as a validator. The private blockchain usually requires permission to be granted. The most important type is Consortium block chain which is generally termed as a semi-decentralized blockchain.
The time required to add an extra block to the block chain is known as block time. The block time is a measure of time taken by the hashing power of the network to find a solution to the block hash. Sometimes, we can say that the block time is the time required by the blockchain miners to find a solution to the block hash.
How Is Bitcoin Related To Blockchain Technology?
Bitcoin is the first ever decentralized digital currency invented in the year 2008 and published as an open source in the year 2009. Bitcoin is released with the alias Satoshi Nakamoto. The bitcoin can be used even in its smallest parts instead of using the whole bitcoin at once as the value of bitcoin is high, Satoshi (1/100000000) and mBTC (milli Bitcoin – 1/1000). Bitcoin uses SHA-256 as its hash function whereas some of the updated versions as Litecoin use scrypt as their hash function.
Bitcoin works on a decentralized networking system where the interference of third party member or any central authority is restricted and the transactions solely take place between users itself making the use of peer to peer networking system. Though there came many cryptocurrency forms bitcoin stands first among them, some of the cryptocurrencies made changes in the structure of bitcoin leading to the invention of better crypto form.
Transaction between the users refer to the transactions between the crypto wallets of the users or user addresses, each and every time a unique address is generated during the transactions to maintain the user anonymity. A user can either use a direct crypto wallet or a wallet used for specific coins as Bitcoin wallet, Litecoin wallet etc or any wallet offered by third parties. We have many hard and direct wallets in use. Users must be careful while using the wallets as once the wallet is lost they can neither get their lost currency nor can retrieve the details or information regarding the wallet.
Blockchain technology plays a key role in the functioning of the transactions of the bitcoin, each and every transaction made with the help of bitcoins are stored and are verified with the encryption of state-of-art which is used in many financial institutions and banks.
The time taken to add an extra block in the blockchain of bitcoin is 10 minutes and sometimes it might even vary. All the transactions take place anonymously without letting the identity to be known, this is the major advantage of using the blockchain technology. Most of the illegal activities or transactions take place using the crypto currencies, thus most of the governments restrict the usage of cryptocurrency in their nation or country.
Blockchain technology has many applications, the blockchain is very much used in the bitcoins and crypto transactions as all the transactions are encrypted using cryptography to ensure safe and secure transactions.
Bitcoins are being used in many fields they are used in making payments while shopping, some educational institutions are even accepting fees in the form of bitcoins. The hype of bitcoins is now-a-days being increased in the online gambling, and most of the players now prefer to play games at bitcoin casinos to enjoy best gaming experience.
For the convenience of the users many bitcoin ATMs have been placed all across the world. By using these ATMs people can either exchange their bitcoins for cash or cash for bitcoins easily. The bitcoin ATM machines are generally known as Bitcoin Kiosks. Charges about 7% of total amount involved in the exchange is added, as per the study. There are about 3164 ATM kiosks or machines all over the world.