BLOCKCHAIN

The blockchain is created by individual ‘blocks’ of data that are made up in the digital ledger, also described as the ‘chain’. When new data is added to the network, new blocks of data are created and attached into the chain.

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Blockchain

Blockchain is an emerging technology capable of improving transaction security. Born with the crypto revolution, it is the technology coding system behind the virtual currency, underlying its entire structure.  

 

The term ‘blockchain’ is very illustrative of how it works. With blockchain technology, transactions are publicly recorded, keeping the identities of the participants anonymous. It is completely decentralized and independent, making it unique. 

 

The blockchain is created by individual ‘blocks’ of data that are made up in the digital ledger, also described as the ‘chain.’ When new data is added to the network, new blocks of data are created and attached to the chain. 
 

Cryptocurrencies (BTC, ETH, LTC...) are virtual currencies built on the blockchain, so both terms are usually related to each other. However, over the years, blockchain has been identified as having great potential for application in other areas because it has immense possibilities to offer. 

 

This technology enables distributed log infrastructures, which can be used to save time recording transactions, eliminate costs associated with intermediaries and reduce the risk of fraud and manipulation.  
 

Blockchain use cases can be classified into two main categories: Recordkeeping, static records of data about high-value assets, and transactions, dynamic records of the exchange of tradable assets. 

 

It allows the transfer of digital data through encryption in a completely secure way. Just like in a company’s ledger, inflows and outflows of money are recorded, but this time, through a digital ledger of events.  

 

Additionally, it includes a remarkable innovation: the information is distributed among independent nodes that record and verify data without the need for a centralized intermediary that certifies the information. 
 

Information cannot be deleted or modified once it has entered the blockchain. Only new records of data can be added. 

  

KEY QUESTIONS 

How does blockchain work? 

Blockchain technology is based on four fundamentals: 

  1. A peer-to-peer network having a shared record of transactions (ledger) 

  1. Consensus to verify transactions 

  1. A contract that determines the rules for the operation of transactions. 

  1. Cryptography keys 

 

Once the business network has been created, the transactions and processes that the blockchain will use as a basis are defined. All the nodes must approve and verify the information, which will then be added to the blockchain in a permanent way. Each block contains a hash of the previous block, a timestamp, and transaction data. 
 

Cryptography keys consist of two keys – a Private key and a Public key. These keys help in performing successful transactions between two parties.  
 

Each individual has these two keys, which they use to produce a secure digital identity reference. This secured identity is the most important aspect of Blockchain technology.  

 

In the world of cryptocurrency, this identity is referred to as ‘digital signature’ and is used for authorizing and controlling transactions. 

 

The digital signature is merged with the peer-to-peer network; a large number of individuals who act as authorities use the digital signature in order to reach a consensus on transactions, among other issues.  

 

When they authorize a deal, it is certified by a mathematical verification, which results in a successful secured transaction between the two network-connected parties. So, to sum it up, Blockchain users employ cryptography keys to perform different types of digital interactions over the peer-to-peer network. 
 

Is it valuable? 

By combining blockchain technology and cryptography, cryptocurrencies enable faster, cheaper, and more successful transactions. It just takes a few minutes to complete, while other transaction methods can take days. 

 

Cryptocurrencies can be exchanged on a peer-to-peer basis, without intermediation by an external entity, as they are decentralized, and not subject to control by third parties. Not only can users transact directly with each other at any time and from anywhere, but they do so autonomously. 

 

Additionally, with blockchain technology, any transaction is available for anyone to see at any time. All transactions are recorded, authenticated, and shared across a wide network of devices. 

  

Is it safe? 

One of the biggest benefits of blockchain is the amount of security it offers, meaning it can protect and secure sensitive data from online transactions. 
 

Digital assets, or cryptocurrencies, use blockchain technology and cryptographic encryption to guarantee its ownership and ensure the integrity of transactions, therefore limiting the creation of additional units or making copies. 

 

With blockchain technology, transactions are recorded in blocks and timestamped. It is a complex technical process, but the result is a digital record of cryptocurrency transactions that is difficult for hackers to manipulate. 
 

In addition, transactions require a two-factor authentication process. Users may be asked to enter a username and password to initiate a transaction. They may then need to enter an authentication code that is sent as a text message to their mobile device. 

 

Become part of the future and open an account with MultiBank.io, where you can access the world of crypto trading with the lowest spreads in the industry. 

 

START YOUR CRYPTO JOURNEY NOW 

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