Cryptocurrencies were created as an application on top a cryptographic technology known as blockchain, hence the name cryptocurrency. Blockchain is a technology that will bolster numerous advances – cryptographic money is only one of them. Most importantly, cryptocurrencies, as we have them today, would not be possible without the blockchain technology.
What is blockchain?
A block is a complex numerical issue based on a cryptographic innovation (called the “hash”) which computers have a goal to solve. Once the numerical problem is solved, the piece is ‘finished’. The vital property of a block is that if you change any data within it, like exchange information and winds up invalid or broken. The best way to settle it is to replace the inaccurate information with the correct and original information.
When a block is made, it takes information from the past block, making a connection, hence the term blockchain. In a blockchain, if any information in any block is modified, the whole blockchain starting there onwards is broken. You can consider it like a pinnacle of wooden pieces, if you break one block in the center of the pinnacle, every one of the blocks above it topple over. The best way to fix the pinnacle is by rectifying the information that was altered. In digital currencies, the blockchain is utilized to store a changeless exchange record for the currency.
Individuals called miners take care of these mathematical problems. They are in charge of packaging together exchanges and after that solving the numerical problem. Mining can be computationally troublesome and in this way requires powerful computers to understand these problems. These computers cost money and critically require electricity to work. So as to boost individuals to mine, they are given a prize for their work either in new coins, exchange charges or both.
Some portion of a miner’s activity is likewise to guarantee that exchanges are legitimate. They do this by guaranteeing that the individual endeavoring to send coins has enough to send and they can look at the current blockchain to decide a wallet’s balance. Since the blockchain is accessible for anybody to see, each exchange made by each wallet is visible to all.