What is Blockchain, It is a database or in Layman terms a Ledger that records the provenance of a digital asset. By inherent design, the data on a blockchain is unable to be modified, which makes it a legitimate disruptor for industries like payments, cybersecurity and healthcare. Wondered a ledger in which data once accounted can never be changed or deleted.
A simple analogy for understanding blockchain technology is a Google Doc. When we create a document and share it with a group of people, the document is distributed instead of copied or transferred. This creates a decentralized distribution chain that gives everyone access to the document at the same time. No one is locked out awaiting changes from another party, while all modifications to the doc are being recorded in real-time, making changes completely transparent. And yes, don’t compare blockchain and doc, blockchain is much complicated than doc.
How Blockchain works: As each transaction occurs it is recorded as a “block” of data. Each block is connected to ones before and after it. Transactions are blocked together in an irreversible chain known as a blockchain.
Blockchain has given one of the trending and innovative technology to us although not in human hands but yes in our computers.
Imagine, human tradition of buying and selling started from barter system than transferred to grains, jewels like silver or Gold, than finally to cash but now one more has taken its place in market and that is digital payment, Yes you heard me right, imagine a currency or money which we cannot feel or touch.
Cryptocurrency, is one such form of a payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service.
More than 6,700 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website. And cryptocurrencies continue to proliferate, raising money through initial coin offerings, or ICOs.
In these times, you definitely have heard about cryptocurrency and and due to recent activities of big giants Elon Musk, few cryptocurrencies are in limelight such as Bitcoin, Dogecoin, Ethereum, Litecoin and many more even the whole market of cryptocurrency became so volatile and oscillating that many traders and buyers of cryptocurrency are becoming one day millionaire or bankrupt.
Cryptocurrencies may go up in value, but many investors see them as mere speculations, not real investments. The reason? Just like real currencies, cryptocurrencies generate no cash flow, so for you to profit, someone has to pay more for the currency than you did.
One question come to our mind is that are they even legal?
The Indian government doesn’t accept crypto as legal tender. At the same time, there are no plans to ban or regulate blockchain-based currencies. The government has, however, made it clear that cryptocurrency’s volatility and unpredictable nature can be dangerous.
I know that’s an diplomatic statement but crypto has no comprehensive laws on the books. However, because of the unclear nature of cryptocurrency, the legal status of Bitcoin and other altcoins is most certainly in flux.
Now, one of the top trending cryptocurrency is Bitcoin. There are no physical bitcoins, only balances kept on a public ledger that everyone has transparent access to. All bitcoin transactions are verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being legal tender, Bitcoin is very popular and has triggered the launch of hundreds of other cryptocurrencies, collectively referred to as altcoins. Bitcoin is commonly abbreviated as "BTC."
Peer-to-Peer Technology: Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the bitcoin network—bitcoin "miners"—are in charge of processing the transactions on the blockchain and are motivated by rewards (the release of new bitcoin) and transaction fees paid in bitcoin.
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