If you already know cryptocurrency, you must be familiar with the term blockchain. Is that blockchain? The blockchain is a technology in various digital currencies where the technology is basically used as a recording system and a database in a network that is able to track large volumes of transactions.
Blockchain was first introduced in 2009, and later in 2014 evolved into blockchain 2.0.
Basically, blockchain is a data structure in cryptocurrency that cannot be changed but can be added. Blockchain has data that is interconnected where if one block of data changes then the other data is also affected.
As you have seen before that Satoshi Nakamoto invented bitcoin which is one type of cryptocurrency designed with the aim of facilitating transactions in a decentralized manner. It can be said to be decentralized because the transaction does not require intermediaries or third parties such as government or banking.
With this system, you can transact wherever and whenever easily without depending on the working day of the bank or government. Of course, this is considered more efficient considering the various rules that you must fulfill if your transaction is connected with a third party. This is the basis for making blockchain.
Here are the blockchain mechanisms you need to know:
The blockchain is a platform where cryptocurrency is run with the function of regulating the storage of additional data in each block.
The block will then form a decentralized network by connecting with each other. As mentioned above, the data that has been stored in the blockchain cannot be changed or falsified.
The decentralized network is a network that presents an effective and efficient transaction process because it is carried out without intermediaries or third parties, and has new technology where the payment system is in the form of a digital currency.
At the end of each transaction, a confirmation is required where after confirmation, all networks connected to the blockchain network will immediately know the number and details of the transaction.
Confirmed transactions will be saved in “Blocks”, where records of the transaction cannot be changed or falsified and are considered as a fixed record of the entire transaction, so that is what is called a blockchain or blockchain.
Blockchain can be likened to a large book in a network that can record all transactions and can also be seen by all network users.
The fundamental difference compared to banks is that the ledger in a bank will be kept by the bank itself and become a secret record where not everyone can see the contents of the ledger. It’s different with blockchain, all of which can be seen and accessed by everyone.
So, from the foregoing, it can be concluded that cryptocurrency does not require humans as intermediaries and does not require a trust between users because cryptocurrency has used complex algorithms that cause no manipulation and promises a real security for its users.
Blockchain has some important traits for you to understand:
The blockchain is open source and transparent. You can read the blockchain code by verifying the written code.
In contrast to conventional currencies where you will never know how much money will be printed or what percentage of the interest rate of a bank in the future. But with cryptocurrency, you can verify through the written code.
The blockchain is decentralized or not centralized. The blockchain code is not centralized on one server but is spread on many computers with a blockchain network. You can also have your own node where your computer contains blocks and transaction records from the blockchain.
Blockchain has a clear supply and inflation rate. Blockchain that is transparent will make it easier for you to clearly know how much the cryptocurrency supply or request is.
Supply is a very important thing in cryptocurrency given that the price and value of a digital currency depend on the amount of demand and demand.
Blockchain has immutable or irrevocable properties. So if you make a mistake in your transaction such as sending an amount of money with an excessive amount, then your money will be lost.
The blockchain is almost impossible to hack because it is supported by many users who participate in securing the network. To be able to hack the blockchain, you must control more than 50 percent of the power of the computer that participates in securing the blockchain network.
That’s the review of blockchain and how it relates to cryptocurrency. After knowing some of these things, are you increasingly interested in exploring cryptocurrency? Hopefully, you can add insight.