Blockchain formation. The main chain (black) consists of the longest series of blocks from the genesis block (green) to the current block. Orphan blocks (purple) exist outside of the main chain.
By original file: Theymos from Bitcoin wikivectorization: Own work – Bitcoin Wiki: https://en.bitcoin.it/wiki/File:Blockchain.png, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=16043262
In order to process a transaction, it is important to see whether the sender actually earns the asset or not. This would make sure that the sender would not do the same transaction twice. With the popularity of Bitcoin, this concept has received much attention. In fact, Bitcoin uses the blockchain technology when processing such transactions to deliver effective results.
What is a blockchain?
A blockchain can simply be defined as a distributed ledger network. This ledger network is the core of Bitcoin. In fact, it uses software algorithms in order to record all the transactions. This is linked with anonymity, security as well as reliability.
When a specific transaction process, several computers, which are connected with each other through a network would start processing the algorithm. This is a cutting edge technology, which is being used in order to verify the transaction. Basic information related to every transaction is stored in the ledger. They include details about the receiver, sender, time, quantity and the asset type. Every single transaction is linked mathematically in the disruptive technology. As a result, the blockchain process is in a position to guarantee the validity as well. When information is entered into a blockchain, the information could never be erased. As a result, we can assume that the blockchain has verifiable and accurate information about all the records that are made in history.
How Bitcoin is made using disruptive technology?
If you are aware of technology news, you would have a clear understanding about the working mechanism of Bitcoin as well. In fact, the combination of blockchain technology and ledger gives life to the cryptocurrency named Bitcoin. This is a whole new dimension of internet technology as well. For example, Bitcoin is a distributed, virtual and a decentralized entity. It doesn’t require any third party involvement in order to validate the transactions. Due to this reason, Bitcoin is considered as a trustless system as well.
Disruptive technology is not just limited to Bitcoin
Even though the first use case of blockchain is Bitcoin, we cannot say that it is just limited to the cryptocurrency. The founder of blockchain developed this internet technology with the objective of processing money transfers and to eliminate most of the issues that were linked with cryptocurrency. This technology eliminates the need of having a central bank, which issues money.
Blockchain technology can be used for many other purposes beyond just monetary use. A large number of startups across the world are currently engaged with the process of exploring these other uses. The financial institutions hold a prominent place out for them. For example, they are looking forward to create digital tokens, which have the ability to unlock physical objects as well as online services for the people in need. In the future, we can believe that blockchain would be evolved to a situation where it can uniquely identify people. Some of the leading companies in the tech industry such as IBM are conducting research on this.
