The following article is a brief introduction to the technology behind Blockchains, or what is commonly referred to as distributed Ledger Technology. The technology is nothing new, but has been gaining in recent years. Back in March of 2021, cash, a competing virtual currency was taken out of circulation. This was followed by Waves, another currency. Both of these currencies are now out of circulation.
Now the Blockchain, also known as Distributed iTunes Blockchain Ledger Technology, is finally becoming the talk of the financial world. The major innovation here is how a number of different groups can join together on the same ledger, without needing to send their transaction requests through a central database. Instead, the transactions are made peer-to-peer. No actual money moves through the ledger at any point. What happens instead is that information is cryptographically secured on multiple computers, which ensure that only authorized parties can access the ledger.
Basically, when a buyer wants to buy some goods from an online vendor, the transaction goes into the Block Transaction Network (BTN), where it is then monitored by the CBN, which is the central authority. When all of the parties to complete their transaction, they then add their signatures to the final transaction and move their money from their account to the seller’s. This ensures that the transaction was valid, and that the seller has ownership of the goods that were bought. The process is repeated throughout the entire life of the transaction, as the buyer and seller sign off on the final transaction all over again.
However, this isn’t the end of the story. In order for the Blockchain to be truly useful, it needs to have its own network of peers, called “miners”. Each miner independently generates new blocks of transactions, securing the ledger and ensuring that no single entity owns the ledger. These separate entities are usually referred to as “relayers”, and the entire process is overseen by an individual or group of experts called “consumers”.
So, how does the Blockchain work? First of all, we need to understand how the protocol works. The main piece of software that runs on top of the Blockchain is called a “blockchain boilerplate” – this is the script or commands which make up the real “blocks” of the Blockchain. These blocks are the real transactions which take place between the buyers and sellers on the marketplaces. Again, this script or command is cryptographically signed by several different parties to ensure that it cannot be changed by anyone who reads it.
Now, how does the Blockchain work with regards to the various types of transactions it can perform? Basically, the Blockchain allows for a particular type of decentralized exchange. The term “decentralized exchange” refers to the fact that the participants of the transaction do not need to trust the ledger in order to trade. This is different from traditional exchange where people need to have some level of trust in order to purchase a specific type of product or service. With the Blockchain, you exchange is done completely online, without any middleman or third party involved, and this is what sets it apart from other types of decentralized exchange.
How is the Blockchain able to accomplish this? Basically, once someone begins to enter into a transaction, they are basically chaining together their private transactions together into a chain. Every transaction is assigned a “block” which contains a reference to the previous block in the chain. However, there is more to the Blockchain than just chaining transactions together. Because each participant in the transaction has their private key, the entire chain needs to be copied accurately and safely before it is added to the ledger. In this way, the Blockchain serves as an online backup for the entire ledger, ensuring that no mistakes are made due to human error or hardware failure.
This same concept applies to any time scale, as the Blockchain can be used to make any type of decentralized transaction during any business hours. It doesn’t matter if the transactions are simple one-way bids and offers, where a company makes an offer to another company to market its product by using the Blockchain as the ledger, or it’s networks like eBay that allows a buyer and seller to transact directly using the Blockchain, without having to go through a middleman such as a broker. The bottom line is that the Blockchain is here to ensure that businesses don’t have to take chances with their finances, by making all of their transactions possible over the course of any business hours.