When most people hear of the term “blockchain,” they assume that it is very complex. The fact that blockchain is closely related to cryptocurrency also makes it seem like a complex phenomenon. For this reason, most people are not keen on understanding what it is about. This is also the reason why the people who take part in the industry are very few. In this write-up, we provide all the information you need to understand blockchain and what it entails.
Essential things you need to know about blockchain technology
Blockchain technology is a very recent concept. Therefore, the concept is still a mystery to so many people. The following is some basic information that will help you understand what it is about.
1. What is blockchain?
The core concept behind blockchain is quite simple. A blockchain is a form of a database. It consists of a growing list of records known as blocks linked together via cryptography. A block is a group of information categorized into sets of data. Each block features a limited capacity. Once it is fulled, it gets appended onto the previous block. Another block is formed, and the process continues as the blocks are packed together to form a chain (blockchain). This is the primary reason behind the name “blockchain.”
The tabulated information appears like a spreadsheet. Also, like a spreadsheet, a blockchain database allows users to concurrently access and filter a vast amount of data. Note that one of the primary aspects that separate a blockchain from a spreadsheet is the way the data is structured.
2. What is a database?
As mentioned earlier, a blockchain is a type of database. Therefore, it would also help if you understood the meaning of this term. A database is a collection of information stored electronically. The information is usually stored on a computer system. The data is also traditionally structured in table format. This format allows for easy filtering and searching for information. For this reason, databases are considered a modern alternative for spreadsheets.
3. What is cryptocurrency?
The term cryptocurrency is often used together with blockchain. This is because the two concepts are greatly dependent on each other. Therefore, understanding the meaning of cryptocurrency will help you understand bitcoin technology better. A cryptocurrency, also known as crypto, is a digital asset used as a medium of exchange. In cryptocurrency, individual coil ownership records are usually stored in a ledger. The ledger typically exists in the form of a computerized database using cryptography. This is the link between cryptocurrency and blockchain. In cryptocurrency, blockchain technology is used to secure online transaction records and control the creation of additional coins. The technology is also used to verify the transfer of coil ownership.
Blockchain technology is a relatively new concept. However, it has excellent potential in a wide range of computing-related areas. The fact that several industries are currently transforming into computing-related fields also proves that blockchain technology is on its way to becoming more popular in the new future.