Blockchain Basics-Every Bitcoin Investor Must Know
Distributed ledger technology or Blockchain has sent a wave of positive disruption across the different business niches. Every transaction that takes place on DLT gets stored in it cryptographically and is time-stamped. Hence, one can easily access the system and trace the information. Thus, making every transaction more transparent and open to everyone who is in the same network. Thus, making it impossible to tamper or tweak the data that has been stored in the blockchain. A very interesting concept, right? If you want to know more about Blockchain, then here are a few basic things you should be aware of.
No intervention by the intermediaries – one of the biggest reasons why blockchain is so popular among people is its reliability. It allows the participants to transfer any asset directly to the receiver without the need for any third-party intermediaries like banks. It offers an opportunity to find out and prove who has real ownership of a particular asset. This is because each block is secured by high-end cryptic code and framework, making it almost impossible to hack or tamper. This truly shows you the kind of authenticity involved in every transaction that you are going to make here.
Whenever the transactions are executed on Blockchain, it doesn’t need the approval of third-party. The buyer and the seller interact and once they agree, the transaction is executed. One doesn’t have to wait for validation or approval. The processing time reduces and transaction fees. This makes the entire process faster and cost-effective.
Blockchain goes beyond currencies – it should be noted that Bitcoin and Blockchain are not the same things as many people would think. Bitcoin or BTC is a virtual currency, whereas blockchain is the tool that makes the particular currency viable. Blockchain is the network through which two users can establish a safe transaction between each other. People can facilitate a more direct and faster way of paying others without any intermediaries in it. The payment can be made through Bitcoin, but the payment passes through the blockchain.
Blockchain is decentralized – Blockchain is distributed across an expansive peer-to-peer network, and there are no central points where all the data gets stored. No one has complete power over the crypto network. The copy of this blockchain is saved on all the computers that are currently connected with the network. It delivers better security and reliability to the users who are on the blockchain.
Blockchain offers transparency – one of the reasons people love the concept of blockchain is that it offers far better transparency than any other network. The users of this network can be anonymous and still be able to make transactions and payments. The blockchain network lacks the presence of any centralized data center, but a copy of the same is present in every other computer in the blockchain network.
Smart contracts – These are pre-programmed contracts that are executed as soon as the conditions of the contract are met. It facilitates this process by triggering actions following the final step of a contract. For example, if you are sending money to a person who is selling pdf copies of books, then the download of the particular book will start automatically as soon as you send the money.
Blockchain is both private and public – there are two different kinds of blockchain networks, private and public. In a private blockchain network, a single entity is the one who decides the participants and can kick out anyone at any time of the day as per their demands. However, a public blockchain network is something that everyone can be a part of. No one has authority over the network. The only drawback of this system is due to the high user count, and the transactions are slower than private networks. Bitcoin is a great example of how public blockchain networks can be facilitated.
The role of Blockchain technology is going to be more profound in the times to come. The popularity of Blockchain and Bitcoin is pretty evident, the investment in them has increased. If you’re interested in investing in bitcoins and other cryptocurrencies, download bitcoin app and buy your favorite coins.