How does Blockchain technology ensure transparency in cryptocurrency transactions? Find out

A blockchain basically consists of three concepts block, node and miner.

With cryptocurrency, a whole new language and technology has come into vogue. While some investors are interested in profitability, others are willing to dig deep and understand the technology on which it operates. Cryptocurrencies are virtual currencies – Bitcoin, Ethereum, and Dogecoin among others – that can be mined, bought, and traded for value. The technology that enables it is called blockchain. It is a system that records data in such a way that it is difficult to alter or cheat the network. It also makes data available to everyone at any time, so that every transaction is transparent.

What is Blockchain?

Blockchain is a digital ledger of transactions distributed across a network of connected computer systems. Each block in the chain is a store of transactions. And every time a new transaction is made, a record of that transaction is added to the chain and led to the ledger of everyone involved. Blockchain works under Distributed Ledger Technology (DLT), where transactions are entered using a cryptographic signature known as a hash.

An example of distributed ledger technology is the Google docs. When a Google document is shared with a group of people, the document is distributed instead of transferred. This allows multiple people to access the document at the same time.

How it works?

A blockchain basically consists of three concepts – blocks, nodes, and miners.

Blocks: Every blockchain consists of many blocks and each block contains data, a record of transactions. It is important that no single person or organization owns the chain.

Miner: Miners are tasked with creating new blocks on the chain through a process known as mining. Miners solve complex math problems to add data to blocks. When a block is successfully mined, the miner is rewarded financially.

Intersection: Each block is connected to another block, forming a chain, through a node. A node is basically the stakeholders of the network and their electronic devices that maintain copies of the ledger and keep the network running.