An Introduction about Block chain Technology

To know about blockchain technology, we must know about bitcoin first and the difference between bitcoin and blockchain. Bitcoin is a cryptocurrency and the blockchain is the technology that underpins it, means by which technology bitcoins transaction running.

The first major application of blockchain technology was bitcoin which was released in 2009 and it is the brainchild of a mysterious person or group of people known as Satoshi Nakamoto. Nobody knows the identity of Nakamoto, but their vision was laid out in a 2009 whitepaper called “Bitcoin: A Peer-to-Peer Electronic Cash System.”

By understanding how the blockchain works with bitcoin will allow us to see how the technology can be transferred to many other real-world use cases.

The bitcoin blockchain

The blockchain behind bitcoin is a public ledger of every transaction that has taken place. It cannot be tampered with or changed retrospectively.

Few facts about bitcoin:
 

• It is not issued by a central authority.

 

• There is a limit of 21 million.

 

• Currently just over 17 million are in circulation.

 

• The first transaction using bitcoin is widely believed to be carried out by a programmer named Laszlo Hanyecz, who spent 10,000 bitcoin on two Papa John's pizzas in 2010.

 

• The identity of bitcoin creator Satoshi Nakamoto remains a mystery.

 

• Bitcoin has often been used to buy illicit products such as drugs.

 
How does it work?

The bitcoin blockchain is “decentralized,” meaning it is not controlled by any central authority or banks. Instead of central banks, the bitcoin blockchain is maintained by a network of people known as miners.

These “miners,” sometimes called “nodes” on the network (e.g. Network nodes in a network), are people running purpose-built computers that are actually competing to solve complex mathematical problems in order to make a transaction go through.

For example, let’s say lots of people are making bitcoin transactions. Each transaction originates from a wallet which has a “private key.” This is a digital signature and provides mathematical proof that the transaction has come from the owner of the wallet.

Now imagine lots of transactions are taking place across the world. These individual transactions are grouped together into a block, organized by strict cryptographic rules. The block is sent out to the bitcoin network, which are made up of people running high-powered computers. These computers compete to validate the transactions by trying to solve complex mathematical puzzles. This validated block is then added onto previous blocks creating a chain of blocks called a blockchain.

Now-a-days blockchain technology has been becoming famous and praised by several industries such as banking sectors. Some organization are planning to develop platform similar to blockchain technology. They see it as a way to reduce costs, make processes more efficient and potentially underpin a lot of their operations. Banks often call blockchain “distributed ledger technology” or DLT to distinguish it from bitcoin’s blockchain. Many major banks have begun carrying out blockchain experiments.