If you wanted to delve into this enigmatic thing called blockchain, you would be forgiven to recoil in horror because of the utter obscurity of the technical jargon that is often used to frame it. So let’s explain what blockchain really is before we get into what is a crytpocurrency and how blockchain technology might change the world. By clicking we get more information about the blockchain projects
In the simplest terms, a blockchain is a digital transaction ledger, not unlike the ledgers we used to record sales and purchases for hundreds of years. In addition , the role of this digital ledger is almost identical to a traditional ledger, in that it records debts and credits between individuals. This is behind blockchain’s central concept; the difference is who owns the database and who verifies the transactions.
For conventional transactions, any kind of intermediary requires payment from one individual to another to facilitate the transaction. Let’s just say Rob needs Melanie to pass £ 20. He can either send her cash in the form of a £ 20 note or he can use some kind of banking app to directly transfer the money to her bank account. In both situations, a bank is the agent checking the transaction: Rob ‘s funds are checked when it takes the money out of a cash machine, or when it allows the digital transfer, they are confirmed by the device. The bank determines whether to go ahead with the transaction. The bank still keeps records of all Rob’s transactions, and is solely responsible for updating them anytime Rob pays someone or receives money into his account. In other words , the bank is keeping and managing the ledger and everything flows into the bank.
That’s a lot of responsibility, so it’s important that Rob feels he can trust his bank with them otherwise he won’t risk their money. He needs to feel secure that he won’t be defrauded by the bank, won’t lose his money, won’t be robbed and won’t go away overnight. This need for trust has underpinned almost every big action and facet of the monolithic finance industry, to the point that the government (another intermediary) decided to bail them out rather than risk destroying the remaining fragments of trust by letting them fail, even when it was discovered that banks were being reckless with our money during the 2008 financial crisis.
In one key respect, blockchains operate differently: they are completely decentralised. There is no central clearing house like a bank and one person does not keep a central ledger. Alternatively, the ledger is spread across a large computer network, called nodes, each keeping a copy of the entire ledger on their respective hard drives. These nodes are connected to each other through a piece of software called a peer-to – peer (P2P) client that synchronizes data across the node network and ensures that at any given point in time everyone has the same ledger version.