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August 30, 2019
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The latter part of 2009 introduced everyone to the world of blockchain technology. With Bitcoin as its front liner, the idea of blockchain technology was well received by everyone, and soon enough, the system responded with a simple complexity of its own. Surprisingly, most people often confuse the idea of blockchain and bitcoin as one and the same, when in reality, they are not.
The difference between both concepts is one that is not easy to identify without prior knowledge.
To understand it in simple terms, blockchain is like a universe, a universe where the currency is bitcoin. One fascinating fact about the world of blockchain is that you do not have to know the nitty gritty of the system before you can effectively utilize the technology. An understanding of the dynamics, peculiarities, and complexities that lies within the system enables you to grasp its full potential.
What is blockchain technology?
Just like the name implies, blockchain is a chain of vast and widely spread database where the storage devices and information are not controlled and accessed by a simple server. The database is capable of storing an infinite amount of information in the form of records. These records are referred to as blocks. The content of each block features a link to the former and a timestamp.
Blockchain also makes use of encryption and encrypted file to protect the privacy of its users. Encryptions are private keys that allow a blockchain user to make different writing to their files. This feature enables the account holder to protect what is theirs.
Also, encryption ensures that the distribution of blockchain among users is in synchrony.
How did blockchain technology come about?
Just like every other thing in the jet age, internet coupled with electronic money facilitated the development of blockchain. The emergence came about from researchers attempt to answer the question of whether they could create a decentralized means of payment that is built solely on trust.
Nick Sabo was the man that conceived the modern blockchain ideas in 1998. As revealed by his newsletter, he postulated a theory that was referred to as the bit-gold protocol. This idea served as the foundation of what we now know as Bitcoin. Prior to that period, Adam Beck conceived his own “Hashcash” protocol, a model of cryptocurrency. Sadly enough, the time of development coincides with the time when people knew little or nothing about fast internet capacity and storage devices. As a result, the development did not enjoy the support that it yearned for.
Not to be daunted by this occurrence, the execution of the project was implemented 11 years later when Satoshi Nakamoto introduced a protocol known as digital cash. This protocol led to the development of the initial blocks of bitcoin.
What is decentralization?
When it comes to sharing information, making use of a decentralized internet platform is not rocket science. However, when valuables like money are concerned, we often resort to the centralized methods that banks and other financial institutions use. Of a truth, internet payment procedures like PayPal has been around for a long time, however, they cannot be used without some bank instruments like the credit card.
This kind of integration is what blockchain technology strive to eliminate. The financial sector performs three major services of registering transaction, confirming the identity of users and finalization of contracts. Blockchain technology is capable of assuming these roles and carry them out effectively.
