Follow this link to see real-time transactions happening on the blockchain.
Firstly, what is a Blockchain?
The Blockchain is a globally-based distributed ledger that allows for direct transactions to be made in a P2P (peer-to-peer) fashion, free of any third party intervention or censorship.
What makes this possible?
This is made possible as a result of utilizing distributed networks. For a transaction to be valid on the network, computers from all around the globe have to agree on it taking place. This is achieved by running ‘nodes’ that operate on an algorithm solving mathematical sequences that complete what known as blocks.
Blocks record one or more transactions. A transaction’s presence in a block confirms when and in what sequence it occurred. This is what gives us the blockchain.
Blocks are created by users known as “miners” who use specialized software or equipment designed specifically to create blocks. Miners compete with each other to see who can first complete the next block and therefore earn the reward(s) for doing so.
In a cryptocurrency system, miners collect two types of rewards: a pre-defined per-block award, and fees offered within the transactions themselves, payable to any miner who confirms the transaction using their computational resources.
The blockchain is the best example of a true and trusted database, because for an entry to be changed, it needs to be approved by 51% of all other nodes on the network. Due to it’s distributed nature across the globe, it cannot be hacked as this would also mean hacking into other nodes all over the world at the same time.
Bitcoin is the first example of an application built on a blockchain, and has so far proven itself to be one of the most successful experiments in history.
Because of the distributed nature of the blockchain, Bitcoin has a fixed supply of 21 million units which cannot be changed. This means that external forces such as corruption cannot influence in any way the value of the currency, unlike the traditional banking system we have today.
There are many more applications of the blockchain than just better money. Bitcoin has paved the way for what is truly possible when it comes to direct transactions. We are only just at the beginning of understanding what other improvements in efficiency can also be made across an entire spectrum of industries.
For more on this, check out the video below released by the World Economic Forum.