Blockchain has only existed for ten years and has started to expand. You can do so much with it that most people don’t really know how to put it in simple words.
Blockchain makes commerce better and reliable. Depending on your goals, you can give them one application or another. One of them turns out to be Bitcoin blockchain, the coin that’s changing the crypto world.
Although Bitcoin wouldn’t exist without Blockchain, most people never hear it unless they research. They hear it on the news and online media(like BitcoinTellAll.com for example), and how Bitcoin is going off the charts.
But Bitcoin isn’t a trading trend. It bases on real advancements with true market value. If we know how blockchain works, it can help us understand what Bitcoin how it will do in the future. Because blockchain is here to stay.
Why Is Blockchain Valuable?
International commerce would be inefficient without institutions. Without banks, there would be a lot of friction with the transfer. Why should we trust each other?
Instead, we rely on an institution to make secure transfers. It adds other privileges, such as buyer-seller protection, money lending, and interest.
But you still need to trust your bank and pay fees for their brokerage service.
Blockchain creates secure transactions, so we won’t need anybody in the middle to monitor. Apart from making transfer cheaper, it prevents banking and accounting fraud.
What Is A Bitcoin BlockChain
1. You buy or sell something online.
2. A computer network verifies it. Each transaction is sequential and comes with data to identify the previous transaction. If they don’t match, they cancel the transfer.
3. Block-chaining. A transaction block has three parts: the previous block signature, your transaction data, and your one-time signature. If the last-block signature matches, they approve it and chain your transaction block.
Mind that the verification steps become more secure as more people use blockchain. For further security, each block has 10-30 minutes to verify before it cancels.
A Blockchain transaction can take ten to thirty minutes to complete. But once it does, nothing will undo it.
What BlockChain Has To Do With Bitcoin
With Blockchain, buyers and sellers can trade with confidence. Because of how it’s built, you only need the block identity.
Blockchain is public, but could be anonymous? That’s what makes a bitcoin blockchain different.
Since it’s designed to be unhackable, there’s no harm in making transactions untraceable.
Bitcoin encrypts the data to protect it, but it’s relative to the number of validations you get. Does it matter if you get ten checks, six, three…zero?
“Imagine you want to buy Bitcoin for $3000 cash with a peer. How do you coordinate to protect the payment?
The trader will send $3000 in BTC to your crypto-wallet, and computers start to verify it:
- 0 checks. No security unless you trust the person.
- 3 checks. Verified for most cases (+75%)
- 6 checks. Highly secure (+90%)
- Up to 30 checks. Maximum (~99%)
The more validations, the safer. After six, you can pay the other person.”
Blockchain has many applications. What we see with Bitcoin today is a demonstration of how powerful it can be — which only leaves us wondering what will be the next big thing.
Editor’s note: This article was written by a guest author from allthingsdefi.io. Visit their site to learn more about decentralized finance and cryptocurrency in general.