What Is a Blockchain?

Bitcoin depends on a distributed ledger system known as the blockchain. The blockchain is possibly the most powerful innovation associated with Bitcoin, as countless industries from financial services to healthcare have begun contemplating how to leverage the technology for their own uses. So it’s worth asking: What is a blockchain?

The essential power of blockchain technology is its ability to distribute information. Because it is distributed across all of the nodes, or individual computers, that make up the system, the term “blockchain technology” is often swapped with “distributed ledger technology.” A blockchain’s database isn’t held in a single location, which could be infiltrated or controlled by a single party, but rather it is hosted by numerous (in the case of Bitcoin, tens of thousands of) computers all at once.

The blockchain network automatically verifies itself at certain intervals, creating a self-auditing system that guarantees the accuracy of the data it holds. Groups of this data are known as “blocks,” and as these blocks are cryptographically chained together, the pieces of data get buried and harder to manipulate. Altering any piece of data on the blockchain would require a huge amount of computing power.

One significant disadvantage of a blockchain, compared with other types of databases, is that this distributed setup requires constant computing power from several different sources to keep up.

Like Bitcoin, the invention of the blockchain as we understand it now is usually credited to the person or group that goes by the name of Satoshi Nakamoto. But actually, the idea of a mutual distributed ledger can be traced back to a 1976 research paper called “New Directions in Cryptography.” For many years the concept was seen as insecure and overly complicated, but when it was finally paired with Bitcoin, the technology’s security and distribution benefits became clear.

Now' new uses for the blockchain are being developed by companies like Microsoft and Deloitte, which believe that its decentralized and verifiable nature give it huge potential beyond digital currencies.

Only time will tell how far blockchain technology can go. If the present is any indication, it will be utilized far and wide.

Comments

Bitcoin Laundering” Study: Where Do Criminals Turn to Mask Illicit Cryptoassets?

A recent study ( PDF ) from the Foundation for Defense of Democracies’ Center on Sanctions and Illicit Finance and blockchain analytics company Elliptic explored the “bitcoin laundering” ecosystem. In the study, Elliptic’s forensic analysis of the Bitcoin blockchain and other publicly available data were used to track the flows of illicit funds from 2013 to 2016. “This study aimed to identify where individuals turn in order to cash out or transmit bitcoins (BTC) acquired from illicit entities and to discover typologies for criminals ‘laundering’ bitcoins,” the report says. The study describes bitcoin laundering as a special type of money laundering that exists within the Bitcoin network where a user moves some bitcoins to a new address in a manner that obscures the original source of funds. The conversion of bitcoins into fiat currency on exchanges that lack adequate anti-money laundering (AML) and know-your-customer (KYC) policies can also fall under the category ...

Soaring Bitcoin Price Leads $159 Billion Crypto Market Recovery

Bitcoin Well, somebody bought the dip. Just as critics were rushing to proclaim that the bitcoin bubble had burst, the markets staged a $159 billion recovery. The rally was headlined by the bitcoin price, which rebounded from its sub-$10,000 fling and is currently flirting with $12,000. Several other top-tier coins, meanwhile, returned single day increases in excess of 40 percent. Source: CoinMarketCap Altogether, the cryptocurrency market cap clawed its way back to $574 billion, representing a 38 percent recovery from Wednesday’s intraday low of $415 billion. Bitcoin Price Eyes $12,000 Wednesday served as a trial-by-fire for recent bitcoin investors, some of whom had purchased the flagship cryptocurrency for $19,000 at the height of the rally in mid-December. Bitcoin Price Chart The correction forced the bitcoin price below $10,000 for the first time since early December, but Thursday’s rally enabled bitcoin to regain a bit...

How to Boost Your Credit—or Build it Up From Nothing

Now that you know how credit works , you probably want to know how to make it work better . While nothing is better for your credit than paying your bills in full and on time, there are ways to give it a boost. Like it or not, credit matters . It’s also complicated. In our “Everything You Need to Know About Credit” series, we’re breaking down the basics. When a lender or landlord looks at your credit, they’re not just looking for a three digit number, they want to know how you actually handle credit. That’s why your credit report is more important than your score. That said, your score matters, too, and the good news is, there are shortcuts for boosting it in a relatively short amount of time. And if you don’t have credit at all — let’s say you’re a teenager about to start college — your biggest focus should be on building up a credit history. That way you can apply for student loans, apartments, and make sure you aren’t gouged on bills . Here are some options...

Gsbt

Search This Blog