Blockchain Technology

What is blochchain

Blockchain is a system for recording information in a way that makes it difficult or impossible to change, hack or cheat the system.

A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and each time a new transaction occurs on the blockchain, a record of that transaction is added to each participant’s ledger. The decentralized database managed by multiple participants is known as Distributed Ledger Technology (DLT).

Blockchain is a type of DLT in which transactions are recorded with an immutable cryptographic signature called a hash.

This means that if a block in a chain were changed, it would immediately appear that it had been tampered with. If hackers wanted to destroy a blockchain system, they would have to modify every block in the chain across all the distributed versions of the chain.

Blockchains like Bitcoin and Ethereum are constantly growing as blocks are added to the chain, significantly increasing the security of the general ledger.

Is Bitcoin and Blockchain the same?

Blockchain is the technology that supports cryptocurrency Bitcoin, but Bitcoin is not the only version of a blockchain distributed ledger system on the market. There are several other cryptocurrencies with their own blockchain and distributed ledger architectures.

Meanwhile, the decentralization of technology has also led to several schisms or forks within the Bitcoin network, which has created extensions to the general ledger, with some miners using a blockchain with one set of rules and others using a blockchain with another set of rules.

In addition to the original Bitcoin, Bitcoin Cash, Bitcoin Gold and Bitcoin SV are available as their own cryptocurrency. With smaller networks, these cryptocurrency blockchains are more vulnerable to hacking attacks, one of which dealt with Bitcoin Gold in 2018.

The origin of Bitcoin

In late 2008, around the financial crisis, a groundbreaking post appeared on a little-known Internet forum titled Bitcoin: A Peer-to-Peer Electronic Cash System. It was written by a mysterious person named Satoshi Nakamoto, a pseudonym used to hide the author’s true identity.

Satoshi believed that the banks and governments had too much power, which they used in their own self-interest. Satoshi envisioned a new type of money called Bitcoin that could change that: a cryptocurrency that was not controlled or run by central banks or governments that you could send anywhere in the world for free without any person or institution in charge.

At first no one was aware of Satoshi’s wild ideas – but slowly more and more people started buying and using Bitcoin. Many thought it was the future of money, and the worse the big banks behaved, the more popular it became.

Since it was formulated and launched in 2009, Bitcoin has grown to a network of approx. 10,000 “nodes” or participants using the Proof of Work system to validate transactions and my bitcoin.

This democracy was prevalent until the development of specific mining computers called ASICs, which overtook other less powerful machines, and companies began to profit from gathering miners and mining technology. It is still possible for a person to participate in the Bitcoin process, but it is expensive to set up and the return on investment fluctuates with the very volatile value of bitcoin itself.

Today, massive mining pools are owned or controlled by large corporations, and power is centralized again. This development has somewhat undermined Satoshi’s original vision for the blockchain, where the participants’ “power” was designed to be evenly distributed – but now concentrated in the hands of half a dozen mining conglomerates.