BLOCKCHAIN TECHNOLOGY- bitcoins and other cryptocurrencies explained in an easy to understand way!!

The world is at the brink of a lockdown; the economy is crashing, all due to the fear of a new pandemic COVID-19.

People all over the world are worried not just for their health but also their investments and their assets. The money that we use today is so volatile that any change in the outer world will change the value of our currency. That is where bitcoins and other cryptocurrencies are different.

Satoshi Nakamoto, who we are not sure refers to one person or a  group of people, was the inventor of the novel Blockchain Technology. Blockchain is a public, distributed, decentralized ledger used to record and verify transactions online. Not to go by the definition, blockchain is very easy to understand.

Blockchain explained

Consider 3 friends  A,B,C. These three friends have many cash transactions. Instead of dealing in any currency, the friends decide to use a digital form of currency called cryptocurrency, that a person called the miner records digitally in a block. He then connects several of these blocks to a chain, hence the name blockchain. You might wonder how some transactions recorded can be validated or authenticated.

When A, B, and C make transactions, they do so by adding their digital signature to each transaction. Each block of transactions, along with their digital signature, is digitally encoded and given an address called a hash. When one block is added to the chain, every new block will contain the hash of the previous block. Changes to the block or transaction will change the hash of the block. Thus transactions once entered cannot be changed and therefore made the transaction authentic. An additional security feature is called ‘proof of work.’ It is a set of mathematical functions that adds to the block making the transaction trustworthy. The ledger is distributed to all people and can be accessed by anyone.

Now, as to how such a currency is not affected by events in the world. Cryptocurrency is not regulated by any other agency. It also inspires transparency. Therefore two countries at war or a large scale pandemic will not change the value of the currency. All this could guide the world and its people to use cryptocurrency as the new currency of tomorrow.