Blockchain is the technology, which was invented in 2008 to power Bitcoin when it launched a year later. A cryptocurrency’s blockchain can be considered as the master ledger that records and stores all prior transactions and activity.
It also validates the ownership of all units of the currency in the system at any given point in time. As the record of a cryptocurrency’s entire transaction history till date, a blockchain’s size increases over time.
Identical copies of the blockchain are stored in every node of the cryptocurrency’s software network – the network of decentralized servers that are run by computer-savvy individuals or groups of individuals known as miners. These miners continually record and authenticate cryptocurrency transactions.
A cryptocurrency transaction technically isn’t completed or confirmed until it’s appended to the blockchain, which usually occurs within minutes. Once the transaction is confirmed, it’s usually irreversible.
Unlike traditional payment processors, such as PayPal and credit cards, most cryptocurrency systems have no inbuilt refund or chargeback functions, though some newer cryptocurrencies have rudimentary refund features.
During the lag time between the transaction’s initiation and finalization, the units aren’t available for use to any party. Instead, they’re held in escrow for all intents and purposes.
This enables the blockchain to prevent double-spending, or the manipulation of cryptocurrency protocol to allow the same currency units to be duplicated and sent to multiple recipients.
Blockchain technology is a secure way to share data with people you don’t trust. Information shared on a blockchain is stored at multiple places at the same time, implying that the data stored is public and thus, accessible to everyone on the internet.
There is no centralized version of this information and that is why it is not prone to get hacked as the data is hosted by millions of devices at simultaneously.
No one party from the exclusive network can make changes or delete any blocks without the consensus from other devices on the network.
Peer-to-peer secure payments are facilitated only through Blockchain technology, and therefore the sharing economy facilitated by the effective functionality of blockchain and cryptocurrency is set for a huge leap.
To get more detailed information on Bitcoin and Blockchain technology, please check the following infographic developed by Bitcoinfy.net, and please share your thoughts: