Cryptocurrencies are the latest investment plan for millennials. If you are wondering why, then here are the answers. Firstly, cryptocurrency has no interference of any third-party financial institution like a bank or any other external body thus establishing itself as an anonymous body. Secondly, you are the sole owner which is why you are responsible for your crypto assets. From buying, selling and managing cryptocurrencies, the private and public key of your crypto accounts are completely on you hence, you have to be very careful with the operation. You should go for a two-factor authentication process and multiple signature gateways to provide adequate security to your account.
Now, all this operation takes place over the internet and in a blockchain structure that keeps a record of all your crypto transactions. If you are wondering how does blockchain work, then you have to keep reading this blog-post as. From what is a blockchain technology to how does blockchain work, you will find everything in this article.
What is Blockchain Technology?
Blockchain is an online structure where all the crypto transaction records (blocks) are stored in different databases that are known as chains in a network connected via peer-to-peer nodes. This storage is usually termed as a digital ledger. Every transaction on this network is authorized by the digital signature of the owner that provides security and credibility of the account. Hence, the signature is the private and public key of the account which is why you have to choose a tough one that is difficult to crack to prevent online thefts and other fraudulent acts.
Why is Blockchain Popular?
Blockchain has many reasons to be popular and they are as follows:
- Very Secure
Blockchain is highly secure as it comes with a digital signature feature that provides credibility to your crypto account. In fact, none of the crypto accounts can be accessible without the signature of the owner which makes it very safe to use. Furthermore, you can also go for multiple signature accounts which makes the signature chosen by the owner mandatory to use the crypto account for any transaction on the blockchain network.
- Decentralised System
Blockchain is completely anonymous which means there are no third-parties involved which makes the crypto transactions an extremely easy affair. You can buy, sell and manage your crypto assets without the interference of any third-party thus saving time and money.
- Automation Process
This is another reason why blockchain has gained popularity. This network can generate payments and other transactions automatically once all the criteria are met.
How Does Blockchain Work?
Now coming to your main concern, ‘how does blockchain work?’ Firstly, you need to understand the entire procedure to get the hang of the crypto world. To begin with, blockchain is the combination of three leading technologies.
- Cryptographic keys
- A peer-to-peer network
- A mean of computing to keep an account of the transactions
The cryptographic keys are two types of keys and they are private and public keys. Both the keys have to be formulated and synced with one another to accent a crypto account on the blockchain network which provides security and credibility to the account. To conclude, these keys are digital signatures providing authority of the account and preventing fraudulent acts. Now, these digital signatures are merged with the peer-to-peer network that leads to bitcoin transaction confirmation. The entire process is a complicated mathematical problem solution solved by two-network connected parties that lead to confirmation of the transactions.
What is the Process of Transaction?
The blockchain technology is not that complicated if you understand the basics. Firstly, crypto transactions are all about buying, selling and managing crypto assets in a crypto wallet. That said, you have to add a sender’s or recipient address to your crypto wallet to buy or send the cryptocurrencies. And that’s when private and public keys are required. Without the sync of these keys you can neither buy nor sell any cryptocurrency leading to any transaction that is stored over the blockchain network. Hence, there are millions of bitcoin mining (process of adding transactional details to the blockchain network) taking place every minute. And that’s where bitcoin miners make an entry. They are the professionals who solve these complicated mathematical problems and confirm the tracking bitcoin transactions over the network. However, they always choose the transactions that come with a higher bitcoin transaction fee as it is more profitable to them. So, if you want your bitcoin transactions to be confirmed, pay a higher bitcoin transaction fee.
Contact Blockchain Customer Support Number
Do you need more information on ‘how does blockchain work’? If yes, get in touch with the experts of Blockchain Customer Support and seek guidance as soon as possible to make your crypto journey an easier one.