Cryptocurrency and Blockchain
By Rahul Desai on The Capital
Introduction
I have seen people talking about Blockchain wherever I go and most of them show a lot of interest in learning and knowing more deeply about the same thing. This article will give you a small brief idea about what Blockchain exactly is and how a transaction process takes place.
Exchange of Currency
The exchange rates that a currency exchange quotes are typically close to the spot rate, although the exchange will adjust this rate somewhat to ensure that it makes a profit on the transaction. Because the transaction is not conducted at the spot rate, and depending on the profit that the exchange wants to make, consumers may find that it is less expensive to incur ATM or credit card fees at the foreign destination, rather than use exchange services ahead of time.
Going cashless is becoming more common as some banks offer cards that can load multiple currencies on them with little or no fees. In addition, offshore ATM’s are a viable option for those banking with a global bank. For example, HSBC ATM’s are prevalent in New York, London, and most large Asian cities.
Evolution of Cryptocurrency
A cryptocurrency is a digital currency designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems.
The decentralized control of each cryptocurrency works through distributed ledger technology, typically a BLOCKCHAIN, that serves as a public financial transaction database.
Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency. Since the release of bitcoin, over 4,000 altcoins (alternative variants of bitcoin, or other cryptocurrencies) have been created.
Blockchain and Bitcoin
The blockchain is one of the greatest inventions in the digital world — the inventor or group of people known by the pseudonym, Mr. Satoshi Nakamoto. But since then, it has evolved into something greater and larger. Bitcoin is basically a first cryptocurrency build on a Blockchain platform, it is a digital asset designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than relying on central authorities.
Blockchain makes digital information to be distributed but not copied, blockchain has become one of the most important and much-needed technology in this new world of internet. Originally devised for the digital currency, Bitcoin the tech community is now finding other potential uses for the technology.
What is Blockchain?
The blockchain is a powerful technology that enables virtual currencies to be open, anonymous, and secure. The blockchain essentially is a huge database that tells every Bitcoin transaction or any kind of other transaction in detail which is also called as “public ledger,” it contains logs that have full proof information about when and how each transaction took place. The ledger is publicly accessible through APIs and SDKs. To prevent tampering with current and also past transactions, the database is cryptographically secured.
How does it work?
Blockchain ledger Records huge information together into blocks and adds to the chain one after another in the following steps
1) For example, let’s say Mr. Ram is a seller and Mr. Shaam is a buyer and Mr. Ram is selling his product to Mr. Shaam for INR 100. The record lists the details, including a digital signature from each party.
2) This transaction record is checked by the blockchain network. The computers in the network, called ‘nodes’, check the details of the trade to make sure it is valid.
3)The records that the network accepted are added to a block. Each block contains a unique code called a HASH. It also contains the hash of the previous block in the chain. A hash code is created by a math function that takes digital information and generates a string of letters and numbers from it, any change to the original input will generate a new hash. So if someone decided to manipulate the data, it would immediately show up, because the hash would change.
4)Thus only the validated blocks are added to the blockchain. The hash codes connect the blocks together in a specific order.
The next block in the chain still has the old hash, so to restore the chain a hacker would have to recalculate that. And the next, and so on. Recalculating all those hashes would take an enormous amount of computing power which is practically difficult to achieve.
Where all Blockchain can be used.
Listed below are various types of use cases where blockchain can be implemented
1)Supply chain Auditing.
2)Crowdfunding
3)Identity Management
4)Land Title Registration
5)Stock Trading
6)Personal Health Management
