The world of blockchain is getting more and more frequent these days. You must also be familiar with this term if you have been in the cryptocurrency investment world for a long time.
Blockchain technology is growing and is known by many people, especially crypto investors. This technology underlies the development of cryptocurrencies such as Bitcoin, Ethereum, and other crypto assets.
In fact, the benefits and functions of blockchain are not only for crypto currencies, but are also used for various other fields related to technology and digitization.
To understand more about blockchain and how it works, just take a look at the full explanation of what blockchain is that ApkVenue has prepared in this article!
Know What is Blockchain
What is a blockchain? Blockchain is a technology used as a digital data storage system connected to cryptography. Its use cannot be separated from crypto assets such as Bitcoin and others.
Literally, block means group and chain means chain. The meaning of this naming reflects how blockchain works, which utilizes computer resources to create connected blocks.
Each of these blocks has a component called a hash. Hash is a character set that composes various information in blocks. The interconnected blocks are later used to execute transactions.
What is the difference between Blockchain and Cryptocurrency?
Cryptocurrency is a digital currency system that is secured using cryptography. This digital currency cannot be counterfeited by irresponsible people.
These crypto assets are created using blockchain technology. So, blockchain is a database that cannot be changed or changed. In essence, blockchain technology is used to store digital data linked by cryptography.
Crypto and blockchain are different, but they are related. Crypto as a digital currency and blockchain as a digital data storage technology related to crypto transactions.
How Blockchain Works
How does blockchain work? In the world of crypto investing, the way blockchain works begins when a block stores new data. As explained earlier, a blockchain consists of a series of blocks.
In order for a block to be added to the blockchain, four things must be available. First, there is a transaction which must then be verified and stored in the block. Then the block is hashed until it can be added to the blockchain.
Blockchain is not centralized and is able to run on its own using computer algorithms without a system that regulates it. Computers connected to this network will execute the program together.
If one of the computers in the blockchain is shut down, then all connected users will be affected. In other words, blockchain is a large-scale computer formed from communication between several computers.
Blockchain Technology Advantages
In general, blockchains like Ethereum and others have advantages in terms of security, speed, and efficiency. To be clear, please refer to the explanation of the advantages of blockchain as follows!
1. Transparent Transaction System
Blockchain can store transaction data securely and transparently. When making transactions, there is public access that can be seen by everyone without having to have login access. This is very different from the banking system in general.
2. Efficient and Faster
Documentation can be stored on the blockchain along with transaction details eliminating the need to exchange paper. There is no need to reconcile multiple ledgers and settlement can be faster.
3. Safe and Secure
The increased security on blockchain comes from the way it works. Blockchain creates an immutable record of transactions with end-to-end encryption thereby minimizing the occurrence of fraud and unauthorized activity.
4. More Cost Efficient
Blockchain can reduce the costs incurred by the organization by reducing the presence of middlemen. This creates efficiencies in processing transactions and reduces manual tasks such as aggregating and modifying data, as well as simplifying reporting and auditing processes.
5. Better Audit System
Everyone can view and track transaction data so they can find out the audit trail of an asset. There is no longer any potential for embezzlement of funds because transaction data is public, immutable, and append only.
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