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BLOCKCHAIN is the technology that runs cryptocurrency.
Before understanding Blockchain and bitcoin,let me take through the issues that we face in the current banking systems.
BANKS :
Banks charge huge transaction fees,fake currencies create the problem of double spending ,there is a long time involved in banking and finally banks can collapse any time such as the 2008 financial crisis . Digital wallets such as Paypal,Citrus and Paytm solve some of these issues ,they allow us instant transfers nevertheless they are still dependent on banks .
BITCOIN:
Bitcoin was the first system to solve all these issues .It is the revolutionary cryptocurrency which is digital payment system running on a blockchain technology.Bitcoin has the following features- very less transaction fees are required ,all transaction are completed within minutes ,it is decentralised in that no one owns the blockchain network,it can never be manupulated or hacked because of the basic structure of a blockchain.
We have john who wants to send 5 bitcoins to lita .This transaction is verified by miners .james and robert are miners ,they then start a race to solve a conplex computer mathematical puzzle called proof of work .Suppose james solves it first he adds his block containing the transaction to the existing Blockchain .he is given 0.1 bitcoin as a reward .This is what we call as bitcoin mining .
Blockchain is public distributed database holding encrypted ledgers .this means a block is the current part of a Blockchain which recoreds the recent transactions. Once it is verified it become a permanent part of growing Blockchain . Blockchain run some three important technologies -distributed machines on the person to person network helps in maintaining the consistency of the public ledger.
BLOCKCHAIN :
,Blockchain uses private key cryptography to secure identities and hash functions to make the blockchain immutable ,the mathematical principle of proof of work ensures that nodes automatically and continuosly agree to the current state of the ledger.
now that we have understood the basic concepts ,lets us explore a few of the real -life applications of Blockchain .