Interested in Crypto-Currency? The Blockchain Technology behind it will blow your mind!
The cryptocurrency trend has by most measures, successfully taken over the FinTech industry and emerged as one of the most talked-about topics in the last few years. Many early adopters and new users were left astounded by the potential of this invention and began to question what it could mean for the financial services sector and rightly so. However, the foundation of cryptocurrency rests on Blockchain technology which is an astonishing invention that has transformed several industries such as healthcare, real estate, insurance and many more.
If you’re interested in investing in cryptocurrency, be sure to discover the characteristics of Blockchain technology first.
The Bitcoin Blockchain: The Basics
As the underlying technology of cryptocurrency, blockchain is a public ledger of every transaction which has been conducted. This information cannot be modified or corrupted which makes cryptocurrency secure and free from malicious attacks. Another fundamental and attractive point to consider about blockchain and cryptocurrency is decentralization or the fact that it is not governed by a central authority or banking institution, unlike fiat money.
Rather than government officials, the network of people that essentially manages this complex infrastructure consists of ‘miners.’ These miners run high-capacity computers to solve intricate mathematical puzzles that are responsible for completing and confirming a transaction. Each transaction is initiated from a wallet that holds its own digital signature which validates that a transaction has originated from the owner of the wallet.
As numerous transactions take place across the world, they are categorized into ‘blocks’ which travels to the cryptocurrency network. Once a computer certifies the transaction upon solving a complex mathematical puzzle, it is finally completed, and cryptocurrency is released as a reward.
The Technology behind Blockchain Security
What makes the technology behind Blockchain even more fascinating is that it resolves one of the most critical challenges facing the financial services sector – security. As each block is supplemented to the blockchain network, it holds with itself a cryptographic reference to the last block.
This reference is a component of the mathematical problem that must be solved to take a transaction towards completion and make it a part of the blockchain network. The puzzle in itself is created of several elements which makes data encrypted. In short, any individual who intends to tamper with the blockchain must re-mine the mathematical puzzles linked with the millions of blocks that were added previously, which is impossible!
The Most Disruptive Innovation of the 21st Century
The blockchain is arguably the most disruptive innovation of recent times because it eliminates the challenges and limitations that several industries face. People have been left stunned by the capability of this technology because it serves as an answer to their problems such as payment scams while eliminating the need to have a centralized authority to monitor financial transactions. The promise of Blockchain has the potential to transform the financial services industry as we know it and let users experience several advantages that they could only dream of previously.