Blockchain is defined as the distributed data structure and algorithm that assists in managing electronic payments without having a regulator or intermediary. The blockchain technology was initially designed for Bitcoins although the other types of cryptocurrencies have also adopted this type of technology. What made the engineers to invent this technology was because the banks and the governments flagged off most of the digital payments.
Working of the Blockchain Technology
Well, blockchain technology refers to the distributed ledger technology that has been designed for the Bitcoin cryptocurrency. Since Bitcoin had been rejected by various governments and banks, they decided to come up with this technology to help their customers transact with ease.
The blockchain technology was thus invented to help customers transact without the need or regulators and intermediaries. Coinmama offer incredible reviews on different types of cryptocurrency.
When we talk about online payments, one of the most common challenges that many technologies face is the double spend. Digital transactions are basically data so it is easier for certain transactions to replicate themselves twice. It is thus important to come up with a system that will prevent the double spend as it might cause much pain to the customers especially if they are charged twice. The blockchain technology prevents the occurrence of the double spend without the need of a reserve fund.
Verification of Payments
Whether we are talking of analog or digital payments, it is always important to verify all the transactions. Whether you are sending cash or receiving cash, it is important for the digital system to check all the transaction to make sure that indeed the valid and correct payments are being made. The blockchain technology helps in the monitoring and verification of the cryptocurrency transactions by calling upon the decentralized networks. The algorithm of the networks ascertains that every transaction is correct before the completion of the process.
So what makes the Bitcoin network, the Bitcoin network is made up by numerous nodes. The numerous nodes that make a Bitcoin network needs to agree that the transactions made in the past are unique before they are cryptographically sealed into something that is referred to as a block. Every time a new block is formed, it is linked to the previous blocks that had been sealed. This is essential as it helps in creating what is referred to as an accepted history. The history of every transaction whether it is the purchase or sale of cryptocurrency is thus recorded.
The secure results in the cryptocurrency are as a result of the blockchain technology that has numerous nodes that have to agree on the order of the particular transactions. Since the network is made of different nodes, it ascertains that all the transactions and the resulting balances are noted down. The records and balance remain provided that the nodes remain independent.