blockchain technology

What is Blockchain and How Does it Work

Blockchain technology is a three piece system that combines to form the larger blockchain.

Those three main components are as follows.

1. Private key cryptography
2. A distributed network with a shared ledger
3. An incentive to service the network’s transaction, record-keeping and
security

Let’s say there are two people who are attempting to make a transaction online. Each of these two people would hold a private key as well as a public key. The main idea behind blockchain technology is to combine a secure digital identity as well as add the ability to communicate publicly. The combination of the public and private key combine to form an essential digital signature.

One of the most important components is security. There must be some form of authentication which serves to approve transactions and provide permission.

The network must be well distributed. In order to ensure there is a full set of security, there has to be multiple places where the server interacts. With the amount of people involved, the amount of security is increasing massively.

The network is currently so large that for bitcoin alone security stands at 3.5 million TH/s which is larger than the top 10,000 banks in the world combined.

When you combine cryptographic keys with the giant network, it forms an incredibly secure and useful process.

One block, which would essentially contain a digital signature, a timestamp, and any relevant information, is sent to all the different pieces within the network.

By offering your computer to be part of the server, the reward is eliminating the possible use of that bitcoin on another server. This also keeps it incredibly difficult to detect.

Bitcoin can then become in a sense property. With an advanced set of security, and the inability for others to use someones bitcoin, there is no difference between it and a physical currency except the physical aspect.

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