If you are not even remotely interested in finance, there is still no way you have been able to escape the world of cryptocurrency. The media seems to always mention the manipulation of the markets by Elon Musk, and how Bitcoin, Dogecoin and Ethereum are just dominating everyone’s interests right now. However, did you know that just over a decade ago, cryptocurrency was obsolete and nobody really batted an eyelid in the beginning? If you are still wondering how all this actually connects to the term blockchain, cryptocurrency is operated by the technology known as blockchain, and it happens to be a decentralised ledger that enables the most secure transactions you can ever do online
The online gaming and gambling world has thrived with this technology, especially gambling. Gamblers from all over the world can place bets and utilise the blockchain technology to remain completely anonymous. Even if there are restrictions within the region that gamblers live, the technology allows them still to make use of all the new horse racing betting sites, or any other niche that comes their way. It has become a game changer for gambling platforms all over the world.
What is blockchain?
Specifically, blockchain is a database driven technology that holds large amounts of information in a chain of data-hence the name blockchain. However, unlike other centralised databases all over the world, blockchain is completely decentralised and runs on no authority. Created to back cryptocurrencies like Bitcoin back in 2008, it was designed to be purely democratic by the people who are using it.
How does it work?
If we simply blockchain, it is a core of ledgers that operate digitally all over the world. Each and every transaction that goes through cryptocurrency, is refined and reflected across all blockchain systems. This means every transaction is reflected on the network and distributed, which is also known as the Distributed Ledger Technology.
A cycle of blockchain would imitate this simplistic model down below:
- A transaction is initiated via cryptocurrency.
- The data is sent towards the peer-to-peer network.
- Algorithms will check the validity of the transaction.
- If valid, the data is transferred to all previous blocks of transactions in the chain, marking the end of the transaction.
What are the advantages of this technology?
This technology provides complete transparency for all parties that are involved in the transaction. Once the transaction is initiated, it becomes binding and therefore performs a smart contract. All users on the network will be able to access the data and have records of the transaction, with no one admin having access to the transaction details.
The technology is most importantly anonymous, meaning for security and privacy reasons it can allow users to not have to disclose identity, amongst other aspects upon making any form of purchase. If a hacker tried to hack part of the chain, they would need to hack all the data in the network, which is almost near-impossible. However, if it was possible, the blockchain would isolate the corrupt block and no longer allow it to pass data from within the system. It is a very smart technology indeed.