Bitcoins are the talk of the town today. Having set a trading record of over $8000, this cryptocurrency has got heads turning with various organizations, institutions and individuals opting for and initiating transactions involving Bitcoins. They are being hailed as a marvel of digital currency in today’s technology influenced era but the main innovation of Bitcoin is considered to be blockchain, the system that handles Bitcoin transactions. So what is blockchain and why is it considered bigger than Bitcoin itself. Let’s dig deeper and have a look.
Invented for the purpose of handling transactions and record keeping for Bitcoin, blockchain, as the name indicates is a chain of blocks of information that are encrypted through cryptography, an ancient art of secret writing. This, however, is not the impressive aspect of blockchain, the really mind boggling element of this technology is how it actually works. It uses what is known as Distributed Ledger Technology to update and record transactions in Bitcoins.
Lack of Centralized Authority
There is no centralized authority that stores or verifies these transactions. The blockchain is made up of several nodes—a computer connected to the network—that is basically any user sitting anywhere in the world dealing in Bitcoins. Each node can make an entry or a record that is saved as a block on the already existing chain which is in turn stored in a format that is not editable and becomes a part of the already existing chain. The record is then updated on all nodes connected to the chain and downloaded automatically.
No Institutional Regulations
There is no regulatory authority that controls or holds master access to this chain. This is remarkable in itself, considering its enormity and how the idea of a self-sustaining, seemingly incorruptible system works. Each block added to the chain is essentially like a bank statement detailing the transaction made from a specific node or individual computer. It is being related to Wikipedia with the sole difference being that although individual users can edit content on the website, it is stored and controlled by a central authority. Blockchain is free from any such governing authority.