Cryptocurrency is the product of the digital evolution that has been taking place for the past two decades. The fact that money is virtual and you cannot see what you earn is something that would need coming to terms with initially, but as technology progresses and gets better and better, it’s not so abnormal anymore. Everything around us evolves with time and so has currency.
The block chain technology used to base cryptocurrency on enables for the flow of the digital currency to happen in a smooth manner. Bitcoin is one of the foremost forms of cryptocurrency. When a bitcoin is exchanged between two parties, the block chain technology makes sure that a new block is created for this bitcoin to mark the transaction. This newly created block is added to the previously existing chain of blocks that mark the previous transactions related to that specific coin.
This way, each and every bitcoin in the network is tracked which allows for simple and effortless transactions.
The working of bitcoin is simple and straightforward. Anybody with a stable connection can participate
- The user has to first download a wallet either on the desktop or a mobile device. This wallet is place where one can securely store the bitcoins purchased and make future transactions
- The wallet comes with a public key. The public key is made up of a combination of thirty four letters and numbers. You can share the public key with anyone you wish to make a transaction with. It is worth noting that the public key can only be shared once
- Using the public key, the two wallets involved in the transaction make contact and to verify the transaction a private key is used. The private key is stored within the wallet
- Once verified, the transaction is exposed to the block chain technology to further verify and approve. This is when a new block is created for the transaction and added to the existing blocks relative to the currency
- The transaction is thus completed.
Another important thing to note is that a transaction once made cannot be reversed unlike a traditional bank transaction. It then becomes a permanent record.
Important Features of BlockChain Technology
The block chain technology forms an important part of the entire network. Here are some of the key features
- It creates a chain of blocks to mark and record transactions
- The technology has a recorded history of every transaction ever made on the platform
- It approves the transaction and ensures that the private key is correctly used
- It tracks the flow of cash across the entire system