Register for real-time alerts, custom portfolio, and market movers
When you enter the bitcoin world, one most frequently used term is “blockchain technology.” The blockchain is referred to as a distributed ledger, including each bitcoin transaction shared over a public network. No changes or any editing can’t be made on the blockchain network. No matter what, no user can delete any bitcoin transaction record from the network by any means. From the experts, it is heard that this network is fully-secured with highly encrypted codes and everything. So, any tampering over the network can’t be made either by any bitcoin investor or user.
When talking about bitcoin functionality, blockchain technology is of vital importance. It is the technology that is used for powering bitcoins. This public network stores all the bitcoin transaction details, which get stored in blocks or groups. The terminals or server farms, all the bitcoin network nodes which get operated by the groups, are termed to be miners. Miners are the ones who make an effort to release a new unit for bitcoins, which gets recorded as a transaction over the network.
Since all the transactions involving bitcoins are constantly occurring without any full stop, it results in the growth of blockchain. Until the miners are active on their work and transactions are being recorded, the blockchain will also stand in the working stage. Or it can be said that there is no length, which can be considered as the end of the blockchain.
As per an average approximation, bitcoin miners are involved in releasing more blockchains. In the new blockchain, all the past and new transactions are recorded within a few minutes. Any transaction involving bitcoin doesn’t hold an occurrence until the record gets available over the blockchain network. As a result, it also makes the bitcoin transactions irreversible when compared to other payment methods involving fiat currencies.
Working of blockchain technology
The blockchain technology used in bitcoin transactions is a decentralized network, which means that it is not under any central authority control.
Since the fiat currencies are controlled by the central authority, it is not the case with bitcoins. There do not exist any central bank or other authority controlling bitcoins. With the blockchain network, a lot of benefits can be availed by a bitcoin user. And one such benefit is no central authority control. A group of people is involved in maintaining bitcoin blockchain technology, which is termed as miners or nodes. These miners work as the people who are involved in finding solutions for certain tricky mathematical algorithms for further transaction processing status. As a reward, miners receive bitcoins.
Pros and cons linked to blockchain
No doubt, one might feel blockchain as an unnecessary step involved in bitcoin transactions. But there are some advantages which make blockchain a better way to secure bitcoin transactions.
When talking about the traditional payment methods available all over the globe for performing online transactions, there is a private network storing the database. The corporate authority holds the right to control this database. Any public user can’t make access to this database that makes it a hidden one. A single entity holds the right over it and controls it without sharing it with the public. With this nature, it can even result in the happening of fraud cases that won’t be easily traced by the public user.
On the contrary, the case for bitcoin is entirely the opposite. With the blockchain technology used for bitcoins, all the data is shared over a public network. It means that all the users can easily see the bitcoin transactions on the blockchain network. Since there is no centralized network linked with bitcoin blockchain technology, it becomes a reliable network for the users.
Some problems occurring in the blockchain
The blockchain technology designed for bitcoins turns out to be operated over a decentralized platform. Over this platform, there is a possibility of several problems.
One problem is with the network turning crowded because of the rise in transactions. It is turning out to be a limitation for bitcoin users to rely upon the technology. As a result, several parties are filing disagreement status due to the network crowding. If you want to dig deeper into the bitcoin blockchain, you can learn more details on the BitIQ
