With the worldwide increase in the adoption of Bitcoin, another major term that has earned recognition is Blockchain. Being a very restricted database, it tracks records of Bitcoin transactions and serves as a digital ledger. It is a decentralized open access ledger with permanent records of transactions, verifiable by thousands of computers, also referred to as the network of peers.
The Blockchain is a digital account where all the records of bitcoin transactions (both deposit and withdrawal) are stored at the customer’s own risk. Though customers control their own transactions, the entire system is fully-secure and encrypted.
Let’s get a quick glimpse of Blockchain & How it Works?
Blockchain, the enhanced mining method can be explained as an array of transactions, all locked within a block through hard to detect ‘cryptographic algorithms’. Hash values are used to link the blocks to each other and create a permanent and unchangeable sequential chain. The entire network comprises identical nodes that operate in a distributed manner, yet independently.
Before getting started, an individual may need to learn the fundamentals of digital wallet platform and its functionality as it involves handling an exchange, further stepping towards hot storage and then possibly towards cold storage processes.
The subsequent step involves the transfer of cryptocurrency from the exchange account to the hot wallet (also refers to as software wallet). The hot wallet or software wallet is one that an individual maintains and that is accessible via the Internet. As soon as the wallet address is shared in the exchange the assets are immediately transferred into it through blockchain transaction.
Though it’s a Powerful Technology…Things will Improve!
In blockchain technology, the transactions are broadcast as updated version of events is created by every single node. The entire network is robust in the way information is registered and distributed to facilitate digital association.
In addition, distributed network lowers down the risk of centralized corruption. Blockchain technology is considered a breakthrough in the digital wallet as it is the orchestration of three robust technologies:
- Private key cryptography
- Incentives handling protocol
Of all, private key cryptography is a powerful tool that accomplishes ownership requirements.
Now, you must be wondering what the ‘ownership’ here refers to. Right? Well, ownership is the possession of a unique private key which can be constructed using a long secret pin.
Authorization is another important step that authorizes that one possesses enough money, broadcasts correct types of transaction and much more. It is vital that the distributed network must be committed to recordkeeping as well as security algorithms of the transactional network.
Both authentication and authorization protocols implemented in this way enables secure and safeguard interaction in the digital world. Without having the need to rely on expensive resources, users can securely interact with the digital world.
So, what makes the Blockchain technology a remarkable innovation is its highly secure and optimized digital wallet? Authentication and Authorization make Blockchain the backbone for transaction layer in digital world.
Though the ground-breaking Blockchain technology made its debut a decade ago, algorithms and processes are still undergoing improvements to take it to next level.