Sunday, June 26, 2022

Blockchain Basics-Every Bitcoin Investor Must Know

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Most of the mass know that bitcoin and other crypto currencies are based on blockchain technology. However, you must know the basics of Bitcoin Mining before you invest in crypto. It is a technology where several computers are working together and sharing data through the blockchainFor example, when you send bitcoin to another user, your data will be converted into blocks for further verification, and miners can verify your data to validate your transaction. If your transaction is declined then another transaction made by another user will be submitted on the same blockchain for verification, and all these information are stored on the blockchain which is also referred as thepublic ledger. 

This public ledger is a part of cryptography and people can easily trace the past transaction made through bitcoin and other crypto currencies to check whether any transaction has been altered or not. Hackers can try to manipulate such past transactions to steal the funds, but hacking of bitcoin network is nearly impossible because submitting wrong data does not work and bitcoin network cannot verify such bad data or duplicate transactions. 

Blockchain of bitcoin: 

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The identity of Satoshi Nakamoto is still anonymous, but it is a well-known fact that he invented the bitcoin based on open-source software named blockchain technology. Blockchain network is a chain of nodes generated by the several computers, and it can maintain a secured decentralized network of transactions. 

Information related to the bitcoin transactions is stored in a form of blocks and these blocks have certain storage capacities. Once these blocks are filled, they will automatically link with the previous blocks and it will create a chain of blocks. 

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In 1991, a research project on blockchain was published. From 2009, crypto currencies were started using this technology to create a decentralized digital network of currencies and assets. Blockchain technology is used for decentralized finance applications, smart contracts and NFTs. It is basically a transaction process where blocks are added on each transaction and validate the transaction by verifying the specific block related to that transaction. 

Transparency of blockchain technology: 

As stated above that bitcoin is based on blockchain which is a decentralized network and no third-party services like bank or government can control this network. People can see the transactions made with bitcoin from their computer as everything is open in blockchain. You can also use your personal nodes to check such transactions. 

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For example, bitcoin has been hacked and there were many exchanges reported with such suspicious transactions. But the transactions made with bitcoin are stored in a blockchain and they are easily traceable. So, if a hacker uses such bitcoin for further transactions and try to convert their coins into cash,it shows up in the blockchain and anyone who with access can see it. Therefore, execuritng such dishonest tasks are not possible. 

It is hard to hack the bitcoin blockchain because each block will be added chronologically and it is impossible to alter the past blocks which are already stored in the bitcoin blockchain. Today, there are more than ten thousand crypto currencies running on the blockchain technology

Advantages of blockchain technology: 

With blockchain technology, crypto currencies can process your digital transactions faster and you do not need to pay a hefty transaction fee for the same. You need to pay a third-party verification fee while you make a transaction through bank and you can save this cost by using Bitcoin. Apart from that, you can keep your transactions with bitcoin private, and you can even hide your information from the government. 

But, the cost of the mining bitcoin is quite high and it is not an eco-friendly process. Apart from that, each block has a specific storage capacity and there is no strict regulation available for the bitcoin and other crypto currencies. 

So, you must keep your funds safe while you invest in bitcoin and you should choose a secured platform for your bitcoin trading. In this case, you can check the reviews of the various trading platforms and choose the best one which does not have any record of hacking activity. People liking highly because of this reason. 

You can start trading bitcoin based on blockchain network and it is 100% secured and safe. However, it is volatile in nature; therefore, you must keep your eyes on the recent market trends to keep your funds safe.

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Radhe Gupta
Radhe Gupta is an Indian business blogger. I believe that Content and Social Media Marketing are the strongest forms of marketing nowadays.

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