Blockchain: The Backbone of Cryptocurrency Transactions
You need to understand Blockchain at a certain point of time if you want to be a part of Crypto currency eco-system. Blockchain is simply a distributed database which maintains a continuously growing list of blocks with a timestamp and a link to previous block. The data in a block cannot be updated retroactively so Blockchain (chains of consecutive blocks) acquires resistant to data alteration – after data is recorded.
If we need to understand in different words, Blockchain is a shared digital ledger over peer2peer network (either public or private). Now every member of the network uses same exact parameters and mechanism to validate or invalidate the recorded transactions. Once recorded and validated, the data cannot be altered further, making all the validation process as permanent audit trail. Due to its secured and unified process of recording the data, Blockchain is the backbone technology behind transaction of cryptocurrencies like Bitcoin, Etherium etc.
Now, in order to understand how Blockchain works as Cryptocurrency transactions, you need to understand the flow of overall process. Let us suppose Person #1 needs to send money to Person #2, where entire transaction is represented as a block. When the block is released in to network, every party can review the recently released block. Parties can validate the block to add it to a chain (sharing the records of all the transactions to the ledger). As soon as the block is added and transaction details are recorded, payment is transferred from Person #1 to Person #2.
Blockchains are going to be future of transactions so if you are planning to play around with it on serious note, educate yourself – read extensively about the subject. Once you are in game, be the one that develops the idea not the one who adopts them later.