Over the past ten years with the success of Bitcoin more and more people have been getting into crypto and have started wondering more and more what is blockchain, how it works, and should we trust it. Fundamentally, a blockchain is a distributed database, shared among the nodes of a computer network.
Functioning as a database a blockchain stores information electronically in a digital format. By utilizing blockchain e-currencies are able to maintain a secure and decentralized record of transactions, thus providing full privacy and security without any easy possibility of hacking and cheating the system.
The reason for this is that a blockchain is essentially a digital ledger of transactions that is copied across every computer on the entire network of computer systems on the blockchain. Each block contains a number and transactions and in order for a transaction to occur it must be validated by every computer on the network, since every participant has a record of transactions.
This technology is mostly known as Distributed Ledger Technology (DLT). Every transaction that happens on the blockchain is recorder with a cryptographic signature called a hash, which means that if only one block has been changed by a hack or a breach, the change won’t occur due to the verification process needing every block on the chain to be the same.
But what’s the difference between fiat money and crypto then? All in all, crypto is based technology that is not owned by anyone except its users, which means its decentralized and no 3rd parties such as states, governments, banks etc. cannot interfere and regulate. Moreover, the blockchain cannot be hacked or changed easily in illegal or unwarranted ways.
Finally, by utilizing blockchain technology people can revolutionize the way we think about money, privacy, and security, as well as take control of their funds in an innovative and exciting way.