Blockchain technology, which has entered our lives with digital money applications today, has become one of the most curious technologies of the age. The blockchain area, which offers a digital identity, a digital control area, is a technology that allows many transactions to take place securely in a global network. Let’s examine it in detail.
What is Blockchain Technology?
People or institutions that follow and invest in cryptocurrencies firstly question how this system works. When we say what is blockchain, which has a decentralised system, it is a database that keeps track of transactions made in an encrypted structure consisting of blocks. Looking at the block structure, it is seen that it is distributed and open to the public.
Each transaction in the blockchain system corresponds to a block. The blocks created in the system, which operates as an encrypted chain, cannot be changed and the passwords are unbreakable. Blockchain technology, which is a system where all transactions are carried out digitally, is used in many areas. But the most common usage area is cryptocurrency transactions and cryptocurrency mining.
What are the Features of Blockchain Technology?
In order to better understand how the blockchain is made, you can see a few important features of the system below.
- It is a global digital passbook.
- Each block on the chain contains a series of transactions, and each time a new transaction occurs on the blockchain, a record of that transaction is added to each participant’s blockchain wallet.
- A database managed by multiple participants is known as distributed ledger technology (DLT).
- Blockchain transactions are recorded with an immutable cryptographic signature called a hash.
- It is not possible to change a block in the chain.
- Each block is encrypted.
How is Blockchain Made?
The blockchain model consists of blocks and records. When we say records, it consists of all content and data in a systematic structure. Records are very important. Because all input-output, money transfers, entered purchase-sell orders, customer records are recorded in this area. When we say blocks, it is the processing of records and turning them into blocks. Records form the structure of the blockchain. It is created entirely digitally and with maximum encryption, accompanied by special algorithms.
What Are the Area of Use of Blockchain Technology?
Blockchain technology has started to become widespread not only in the purchase, sale and production of cryptocurrencies, but also in many different areas. Although there is still an area where there is a trust problem, you can find the usage areas of the blockchain system, which is increasingly used globally.
Financial sector: The financial sector is the most used reason for the blockchain system. In this chain, all kinds of payment transactions are carried out with cryptocurrencies. Payments are made by the method called peer to peer and extra commission fees are not requested as in banks. In blockchain technology, financial transactions are carried out both individually and institutionally.
Foreign trade: The chain, which has started to be used in foreign trade transactions and prevents high payments such as interest and commission, has a high usage rate in foreign trade payments. On the other hand, with blockchain technology, it is possible to carry out an advantageous foreign trade independent of many issues such as documents, intermediaries, commissions, by overcoming many prominent steps in foreign trade. With smart contract, digital invoice and blockchain technology, it has also made a name for itself in the import and export sector.
Supply chain: Thanks to the smart contracts offered by the blockchain technology, which enables the supply chain to be made quickly, safely and at less cost, it has become an effective method in delivering products to the consumer without any problems.
Smart contract: In transactions made through the blockchain, all transactions are digital and secure, shortening the process and reducing paperwork etc. as well as reducing costs. For this reason, blockchain technology, which enables fast and secure handling of many daily tasks, enables smooth transactions by using smart contracts in individual or corporate transactions.
Health sector: It has a database that provides immediate access to personal or institutional health information in the health sector. By storing health information and data in the blockchain, individuals can access it quickly whenever needed.
Donation: Blockchain is also used globally in social responsibility projects such as fundraising. All stages can be recorded and seen by the donor, and the transparency of the blockchain is very advantageous for donors and institutions in this area.
What Are the Types of Cryptocurrencies Using Blockchain Technology?
When it comes to blockchain types, blockchain technology has entered the lives of many with cryptocurrencies. Cryptocurrencies are trading, manufacturing or other transactions using the blockchain application. Among the blockchain types, the most widely used and the first ones that come to mind are the crypto money types called Bitcoin and Ethereum.
When we talk about virtual currencies, there are many cryptocurrencies other than Bitcoin and Ethereum, and we have listed below cryptocurrencies, each of which has an important capacity in the blockchain financial money market.
Bitcoin: It is the most well-known digital currency, an alternative to currencies such as the dollar and the euro. It is abbreviated as BTC and is the first cryptocurrency. The answer to the question of who invented the first cryptocurrency was found by Satoshi Nakamoto in 2009. Although the market value of Bitcoin is fluctuating, it shows growth momentum.
Ethereum: Described as Blockchain 2.0, Ethereum was found by Russian-Canadian writer and programmer Vitalik Buterin, born in 1994. Ethereum is the most preferred and also highly mined cryptocurrency today. It is the cryptocurrency with the highest market capacity after Bitcoin. It is known that Ethereum mining is done by more than 600 thousand people globally.
Dogecoin (DOGE): It is a popular cryptocurrency with a high preference rate. Also known as Doge. Its market value is high.
Cardano: It is a virtual currency that was found in 2017. It is a decentralised blockchain technology structure. Its total supply is limited to 45 billion units.
Chiliz (CHZ): It is a cryptocurrency that emerged in 2018. Alexandre Dreyfus was found.
Ripple (XRP): It is a centralise cryptocurrency. It uses blockchain technology, but the ledgers are managed by Ripple Net, not a blockchain wallet.
Litecoin (LTC): Invented by Charlie Lee. It is the first alt-coin.
Tether (USDT): Its value is in US dollars. It is called a stable-coin. One tether is equivalent to one US dollar.
Chainlink (LINK): Developed by a business called SmartContract. It is a decentralised cryptocurrency. It is a unit in the field of blockchain technology where different transactions can be performed off-chain. Its total supply is 1 billion.
If you wonder interesting facts about Blockchain Technology and Bitcoin, you can just click the link: Blockchain and Bitcoin: Amazing Facts you Might have Missed