The term ‘block chain technology’ is basically used in reference to the cryptocurrencies and Bitcoin. This technology holds the responsibility of existence of the cryptocurrencies like bitcoin. Without Block Chain Technology, the cryptocurrencies wouldn’t have been introduced to the world. It is a database that is used for sharing the cryptocurrency related data across the computer peers. It is quite hard to eliminate the data after it is added to the chain. The block chain behind cryptocurrencies is a public ledger of each and every transaction that ever takes place. If you are keen to know more about block chain technology, then read further.
Block Chain Technology- History
A Hash Tree aka Merkle Tree is the primitive form of the block chain technology. The structure of this technology was patented by Ralph Merkle in the year 1979. Its designing was done to work between the peer-to-peer networks of computers and making sure that there is no alteration done in the data while it gets transferred. Moreover, all the authentic data is kept safe by it while being shared. It also helped to ensure that no false data was sent. Its main purpose is to maintain and prove the authenticity of data being that is being shared. In 2008, Satoshi Nakamato conceptualized a distributed block chain that compromised a secured history of all data exchanged, time stamping for peer-to-peer data exchange, and verifying the changes without a central body. This is how the cryptocurrencies were introduced to the world.
The Working of Block Chain
There are two types of keys that are responsible for the working of block chain- Public Key and Private Key. The user is given a unique digital signature with the combination of these keys. A person gets recognition through these signatures that help other users in identifying him. The private key allows a user to digitally sign and authorize an action on the behalf of the digital identity with the public key. Basically, it is a form of E-wallet used for storing cryptocurrencies. Through this wallet, the user can perform all the activities related to the transaction of cryptocurrencies. If the ledger consists of the same data i.e. a digital signature, unique ID, timestamp, and a public key, then only the transaction process is completed.
The Need for Decentralization
In order to make this technology immune to tampering, censorship, and hacking, decentralizing the block chain technology is necessary. The copies of the bitcoin ledger are stored in different locations as it uses the peer-to-peer network system. Making a modification unnecessarily will create an obstruction in the procedure of the transaction as various types of independent nodes work together for keeping the track of the ledger records. The block chain technology is considered as the future of the cryptocurrencies and this is why many countries are adopting it.
Still, the block chain technology isn’t perfect and it has several loopholes in it. Experts are working continuously on it in order to make it flawless.