Blockchain basics and its role in bitcoin

Understand Blockchain technology:

Blockchain technology is a system that stores data in a distributed way. Suppose a group of computers is working for the same company and they are connected by the internet. When one computer is creating data, that data is stored in its ledger. You can call it a block. So, the data is stored in that block. Now, the duplicated form of that transaction will be stored in each block or every system ledger because they are connected. This is the basic form of Blockchain.

Now, let’s understand how it works. Suppose one computer tries to send money to another computer. The moment it inputs the information, the information is represented as a block and the duplicated forms of that information are broadcasted to the other computers. Once the transactional record is verified by the computers, the record is stored in every block with timestamped and the transaction is processed.

At the time of the next transaction, a new block is represented with the transactional data of the previous block along with the new transactional inputs. Here also, the block gets verified and once it is done, a new block is created and the record is stored in that new block with its duplicated form in the ledger of all the computers. The blocks here are connected like a chain with the previous verified transaction records. So, it is called Blockchain and that is how Blockchain technology works.

Blockchain in bitcoin:

In bitcoin, the Blockchain works the same way. Here the users of the bitcoin network make transactions and the verifiers are known as miners. The data verification process in the bitcoin network is called mining.

Mining is a complex process that is done by computational power. The transactional data are stored in a part of a block which is known as a blockhead. In blockhead, there are seven components or layers including the mining software and the layers of timestamped data. The main part among them is the difficulty target which is a hash number with several zeros. The miners actually solve the target which we call verification of the blocks.

Here also the data are equally distributed among every user of the bitcoin network.

Some benefits of Blockchain technology in bitcoin:

1. Blockchain technology enables the formation of a system that is decentralized. In Blockchain, there is no central point of regulation and the miners also don’t need any central power for the verification of blocks.
2. Because of a decentralized form, all the users of the bitcoin network have the same and equal power. They have control over their own money.
3. The Blockchain in the bitcoin system is open-sourced. Anyone, who becomes a part of it, can use the network. One of the best benefits of Blockchain technology in bitcoin is it forms a network that is the same throughout the world. So, sending bitcoin from one nation to another doesn’t include any complexity. One of the main problems which you might have faced previously while traveling from one corner of the world to another is the issue of currency exchanges. In simple words, you cannot utilize your country’s currency to buy from another country with some different currency. The first thing that you need to do in such situations, is to run for the currency exchanges present near you and get the necessary acceptable currency. However easy the process might seem in the initial stages, it is not so in real life. If you use Bitcoins and other cryptocurrencies instead of these fiat currencies while traveling, then you would not have to rush for the exchanges as there is no variation in Bitcoin, which also makes it possible for it to become the global currency someday.
4. Another crucial benefit is it enables peer-to-peer transactions.
5. Most, importantly, Blockchain technology has some safety measures that make the bitcoin network secure for the users and protect it from scammers. All the data in the system are encrypted and decrypted from time to time, hash puzzling is applied in the verification process, and the data are also distributed so, modification and deletion of any data are not possible here.

Conclusion:

Due to the technology’s amazing benefits, bitcoin is being accepted by the people massively and they are investing in this crypto to make a profit out of it. If you also find it beneficial you can invest in it efficiently with various applications and sites like bitqt-app.  A thorough knowledge in the field is highly needed to proceed.