Blockchain technology what is it?



19 października 2021
Blockchain technology what is it?

Blockchain technology what is it?

Cryptocurrencies are becoming more and more popular every year. This is absolutely no surprise, as many transactions can be made with them. A perfect example of the fact that cryptocurrencies are one of the most promising means of payment is the fact that until recently it was possible to buy a Tesla car for Bitcoin (now Tesla has changed the possibility of paying with Bitcoin to Dodgecoin). So if you are investing in cryptocurrencies or are planning to start your adventure with internet currencies, you should know what blockchain is.

What is blockchain?

What is blockchain is one of the most frequently asked questions. Well, few people know how the above-mentioned technology works and, above all, what it is for. If you belong to this group of people, we have great news for you. Well, with you in mind, we have prepared some of the most important information about blockchain. So let's start with the basics. It is a modern technology that is also often referred to as a digital transaction ledger. It sounds mysterious? Well, at first glance, this definition may seem incomprehensible, but in a moment you will understand what blockchain is and what its phenomenon is.

Thanks to the use of this technology, it is possible to save in the memory information about transactions that have been carried out on the Internet. Interestingly, blockchain works both when buying cryptocurrencies as well as stocks, shares or traditional currencies considered in most countries as a means of payment. The great advantage of this technology is the fact that it does not need a central computer system to function. So how is it possible that this system records and stores data? All information about the transaction is saved by specific users. Information on the transactions made is stored in so-called blocks. Each block, however, has certain limitations, so when it is full, another one is created, at the same time creating a chain, or blockchain.

How does blockchain work?

The above-mentioned blocks, which contain information about transactions, are scattered over the network and then archived by users. Thanks to this option, the system does not need a central computer, as each user equipment can send and even authenticate transactions. Is it safe? At first, it may seem that how blockchain works does not reflect its security well. However, it is worth realizing that to secure this system, cryptography is used, which is almost impossible to break. You need a specialized computer with high computing power (the so-called quantum). At the moment, however, this is a topic that should not be on your mind, because blockchain technology will not only be extremely difficult to break, but also resistant to fraud and counterfeiting attempts. How is this possible? What happens when someone tries to cheat?

The first step a fraudster would have to take would undoubtedly be to try to change the transaction (or delete it, for example). Anyone of this type is automatically caught by the system and then rejected. It is therefore safe to say that it is one of the safest mechanisms. Interestingly, blockchain, i.e. transaction books, are available for viewing by their users. This means that anyone who wants to verify a transfer can do so. The fact is, however, that in order to have access to detailed information on a transaction, you must have the rights to do so that are enjoyed by the people who participated in the exchange. This is an additional form of security, primarily aimed at protecting system users.

Blockchain application

Currently, blockchain is associated primarily with investments in cryptocurrencies. It is mainly used to protect users who purchase or sell popular internet currencies, but it is worth noting that it is not its only use. The blockchain system is often also used to keep professional accounting books (it is useful, especially when we deal with many online transactions). Using blockchain can also prove extremely useful when controlling your expenses, all thanks to blocks and the ability to view your transactions. We are well aware of how important online currencies have become nowadays. Therefore, if you want your finances to be properly secured, use our services and see how simple it is.

Attention! The above article neither in whole nor in part constitutes a "recommendation" within the meaning of the provisions of the Act of July 29, 2005 on trading in financial instruments or the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of April 16, 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directives 2003/124 / EC, 2003/125 / EC and 2004/72 / EC and Commission Delegated Regulations (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65 / EU of the European Parliament and of the Council as regards organizational requirements and operating conditions for investment firms and defined terms for the purposes of this directive. The content contained on the website does not meet the requirements for recommendations within the meaning of the above-mentioned act, incl. do not contain a specific valuation of any financial instrument, do not rely on any valuation method, and do not identify investment risk.

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