The Background and Basics of Blockchain Technology – by IronX

CurrencyTimes : How everything began
Blockchain, the basis for popular cryptocurrencies like Bitcoin and Ethereum, is a technology that was inspired by the Merkle tree. This data structure was created in 1979 to validate and handle data between computers in a P2P network, explains IronX. In 1991, the Merkle tree then helped establish a chain of blocks, or series of data records, forming what is known today as “the blockchain”.
It wasn’t until 2008 when anonymous creator, Satoshi Nakamoto brought to life the decentralised blockchain technology. This technology is a secure and distributed ledger containing records of all verified transactions that have occurred on the P2P network, without the intervention of a central authority

Blockchain Functionality
Each data exchange, or “transaction”, is recorded in a blockchain ledger. Each transaction is signed and verified by a P2P network of nodes and then added to the ledger, creating a “block”. This data cannot be altered or corrupted in any way.

Every unique identity is established via a Private and Public Key. Together, they are combined to give a digital signature.
Public key – a user’s ‘address’ on the blockchain.
Private key – similar to a password that is used to ‘sign’ and authorise transactions.
Users are obliged to keep their private key safe as it is allowing the access to their digital assets.
Every transaction in a ledger contains a public key, a digital signature, a timestamp, and a unique ID, reveals IronX. Each transaction is linked to the next, so all its history is visible on the chain.
Main Features

With transactions made public, people often wonder how anonymity can play a part. The randomisation of numbers and letters of a public key ensures that concealment of identity is achieved.

Blockchain technology is decentralised. This ensures it is immune from censorship and any third party does not control it, IronX points out. This way, tampering and corruption are prevented. Instead, control is in the hands of the individual user. Via its P2P network, copies of the ledger are recorded and stored across the blockchain, making it even harder for hacking. Bitcoin, for example, has more than 30,000 nodes on its network – it is difficult to modify anything on the chain because all other nodes will disagree with the transaction and it won’t be added to the ledger.

Blockchain technology is the future, according to the opinion of many. Several techies and economists are in support of this technology, says IronX, and they believe it is only a matter of time before it is adopted by every business sector worldwide.

Loren Smith
Loren has an MA in Science journalism and has worked for the BBC for the past 18 months, She has an honors degree in Anatomical and Physiological sciences and a passion for news media and had articles published in New Scientist

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