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Blockchian

What is a ‘Blockchain’?

A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.” investopedia.com

Creating cryptocurrencies without a centralized regulator posed a problem for developers. How can you secure and validate the transactions? There has to be community wide consensus on balance otherwise the whole system crashes.

With regular currency we have banks that oversee transactions and keep a central ledger however cryptocurrency transactions are all recorded with every peer in the community. Any transaction is immediately sent out to the entire community.

Blockchain image

Transactions

Transactions are secure and authentic, there is a community of miners that approve them. Miners need to qualify for the position by finding a hash known as Proof-of-Work which essentially means solving a digital puzzle of sorts. Anyone can become a miner if they choose and this is to ensure that the confirmation of transactions cannot be in the hands of a single person. This whole process of processing and confirming transactions builds the blockchain, which is the basis of whole concept of cryptocurrencies.

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