Again, like never before, we need to talk about cryptocurrency. The market is eventually growing, and now it’s even big with Elon Musk’s support for crypto. In the true battle between Fiat & crypto, Musk tweeted, he would support the latter. Clearly gave a solid push to the crypto market.
The cryptocurrency market grabbed eyeballs for quite some time now and is exceptionally at its best with blockchain technology. It must have been impossible for cryptocurrency to gain attention without blockchain, or even the market doesn’t hold any importance without the disruptive technology.
Blockchain is a type of database where it stores a variety of information and shares it across the network. Blockchain is a digital ledger of transactions when it comes to cryptocurrency. All the data is safe and secured – stored in an encrypted format. The data stored in various blocks are chained together to form a chronological single-source of truth for the data. So participants’ ledger will be updated whenever a record of a transaction is added to the blockchain.
Blockchain gained trust and security among the people. It has become popular because of its reliable nature. Although several attempts have been made to run digital currency, only blockchain remained successful. Now you know why and how people believe in the technology behind cryptocurrency.
Authentication plays a crucial role in digital currency. In every transaction, there are two parties involved: sender and receiver. So the transaction between these two parties is authenticated using cryptographic keys that act as a password. There are two keys – public and private. So, these keys will help users perform transactions, and this step will create a block that consists of the transaction information.
Authorization is the key to every transaction. So the majority of “nodes” must agree that the transaction is valid and authorize it. As a result, the transaction is sent to every node on the network.
Proof of work is an exciting point in the verification of transactions. People get incentives to verify transactions. They are required to solve complex mathematical problems called mining and make the authentication process simpler. These miners get rewards, usually in the form of cryptocurrency, for the work that is done.
Blockchain network will now have one more transaction added to it, just after this entire authentication process, authorization, and proof of work is successfully completed. The information added to the blocks and connected via chains will be shared across the network participants ensuring transparency.
With its great potential to create a decentralized peer-to-peer network, Blockchain can make a trustworthy environment for organizations across the globe. Sooner, it will gain greater adaptability and acceptance among multiple sectors.
You go, Blockchain!