Knowing The Underlying Technology Behind Bitcoin

Before we dive deeper into Bitcoin, we need to understand the underlying technology behind it. Bitcoin’s technology is called blockchain. Before we continue, make sure to understand the basic idea about Bitcoin, where you can read more on this link.

Decentralization of Power

Decentralization matters because it gives a “check and balance” feeling to every participant. If one entity has too much centralized power, it’s very likely this same entity can abuse his power, and most people still wouldn’t be able to do anything about it. The concept of blockchain is to prioritize decentralization by nature.

It’s an innovative technology that forces everybody to be accountable for his/her actions.In a blockchain, the mechanism of passing records is automated and secured in a unique way.

When one party broadcasts a transaction, it begins the process by creating a new block. This block would need to be verified by thousands of computers all around the world (or more). The verified block, then, would be added to the chain and stored publicly. This record of processes is immutable because you have to falsify the entire chain if you want to falsify just a single record.

When there are thousands of entities participating in the same blockchain network, it would be almost impossible to falsify the entire chain due to these decentralized powers from all over the world. Think of keeping your record in a simple notebook. If you are the only one maintaining that notebook, you can just edit the record anytime you want. But if any edit for the notebook requires thousands of approvals from different people all over the world, most likely you will never get those approvals from these people that you have never met.

Blockchain Is About Trusting The System

Bitcoin utilizes this blockchain technology because Bitcoin believes in immutability, transparency, and decentralization of power and influence. Bitcoin transactions are all utilized by the Bitcoin blockchain.Unlike centralized systems where you need to trust whoever issues or maintains the system, the blockchain allows you to trust the code and the system itself rather than whoever maintains it.

The check and balance mentioned above ensure that the blockchain technology is safe and secure when there are more participants and diverse entities or individuals.Even those people who don’t actually believe in Bitcoin and other cryptocurrencies might still trust the blockchain platform.

Many banks and big corporations are still experimenting with blockchain technology despite the fact that they don’t have faith in cryptocurrency prices.If this article makes you more interested in Bitcoin and the blockchain, this article might be able to help you understand the concept more. Check this article.