Image source: forbes.com
Blockchain technology is the technology which is used for all type of cryptocurrency transactions. Blockchain is completely digitalized, decentralized, and public ledger. Blockchain stores all data in the form of block for all transactions and these blocks can be added and deleted from Blockchain in the chronological order. For all transaction of digital currency, it is good if all of its users have kept record, Blockchain technology provides this record keeping option to its all users. This record information will also download automatically in the computer which is using by users. Information is downloaded only when computer is connected to internet.
For first virtual currency which is Bitcoin, there is need for security mechanism so that users can make secure and effective transactions with complete data protection, Blockchain technology developed. In the current trend, famous distributed ledger technology (DLT) is used so that all transactions will be verifying. DLT technology is used for verifying transactions which are based on digital currencies. Blockchain technology creates block for storing information and maintain a record. This record cannot be changed at any cost and whole community is here for following Blockchain technology.
Interrelation between Blockchain and Bitcoin
According to average, a new block is appended to Blockchain within 10 minutes. There is one of most famous developed technology innovation has been done due to Bitcoin which is termed as Blockchain. There is no authority for its rules and regulation because it is decentralized technology. Only the users of Bitcoin can validate and check all digital transactions when one user is paying to other user for getting his services or goods. There is one to one relation between Bitcoin and Blockchain, no requirement for including of third party whom you can trust such as banks. All information from Blockchain is stored in blocks. Each block in whole Blockchain contains:
- A set of all valid transactions
- Link with previous block
Blockchain is categorized into main three categories which are public Blockchain, consortium Blockchain and private Blockchain.
- Public Blockchain
A Blockchain, which is read by everyone and everyone can transfer digital currency to other person without any kind of doubt, is known as public Blockchain. Blockchain user will also get an option to check that transactions are valid or not for participation in the consensus process.
- Consortium Blockchain
Consortium Blockchain is the one where a set of nodes is required for all processes which includes consensus and get controlled over it. This set of node is pre selected. Every user for validating its transaction must have to sign every block.
- Private Blockchain
In private Blockchain, all written permissions are authorized only for one organisation while read permissions are available for all users. Auditing and database management are organization applications for using private Blockchain technology.
This Blockchain technology is used in every field. Economics status of every country is taking growth with excessive use of Bitcoin and digital currency because data protection is purpose of this technology. All payment related transaction facilities are so effective with this technology and you will also have to know about its benefits.