We have been hearing Bitcoin a lot in Social media, office colleagues, from your friend, and your friend's friend that earn a bunch investing in Bitcoin.
Many of us are curious. What is this new currency that took the world by storm? We did our research. Some rode the trend. I got curious and it took months before i started investing in it (regrets...). Of course I don't want to put my money on something that i don't have any idea how it works.
I'm pretty sure if you're reading this you already have an idea on what bitcoin is. Like, It was created by Satoshi Nakamoto, It was being used on the deep web for Peer to peer financial transactions. and so on and so forth. Now after months of researching this so called bitcoin. One thing that caught my attention and made me trust on it is the underlying technology that made bitcoin possible. And that is the Blockchain.
So what is Blockchain?
Blockchain is a decentralized database.
When you have an important data that you don't want to be altered or lost. You keep it in a very safe place so no one can alter or delete your precious file. That makes it a centralized data.
Now, instead of keeping my data in a very safe place (let's say under my bed) so that no one can delete or change it. I shared my data (sealed in an envelope so that they cannot read it) with my brother, sister, friend, neighbor, neighbor's dog and my girlfriend. After I shared my data. I lost my copy. What I will do is I will ask the people who i have given the copies for the data that i shared with them so that i can recover it. This is a decentralized database and this is what blockchain does.
This is what makes Bitcoin and the world of cryptocurrencies secured.
It is is a shared ledger. The data is stored in these so called "blocks" that are linked together and is validated by miners. The data on the blocks are encrypted so no one can simply read the information you have. The purpose of the miners is to mine blocks and validate transactions If the data that I gave to my brother is the same as the one with my sister.
What makes the blockchain secure is if my data got lost, stolen or hacked. The data with me will be invalidated by the miners when they compare it to the data that my brother and sister and everyone is holding. So the only way to alter my data is for the hacker to ruin more than half of the records in the blockchain, For the other half of data to be invalidated. its like a 51:49 principle. The majority makes the data right.
In comparison. If a hacker is planning to hack you on a centralized database. He would only need to worry on how he can penetrate on that single database. If your security is not good enough then. There's a pretty good chance that your data will be lost. But with a decentralized database system. There is a chance, yes. but with the number of shared ledgers and millions of miners to validate the data that you are holding then. I don't think the effort will be worth it.
In my opinion, one of the greatest thing the Blockchain can offer is data security and i am looking forward for more applications of this technology in our society.
I hope you've learned something good today!