Technological innovations have been adding newer dimensions to business. Gone are the days when one had to queue up at the bank to do deposit and withdrawals only transactions and that too within the limited working hours of the banks during the day. Now you can do banking right from the comforts of your living room and that too in alternate currencies which are digital in nature i.e. cryptocurrencies.
A cryptocurrency is a virtual or digital currency with cryptography as a security platform and operates under decentralized financial environment as it is not issued by any central or federal authority and does not fall under the purview or regulation or manipulation by any government entity as it follows free trade concept.
Business transactions need to have a secure and efficient bookkeeping to maintain details of the business transactions be it financial or non-financial in nature. And it applies equally to the cryptocurrency trading and it becomes all the more important to have a reliable foolproof system in place when financial transactions are involved. Blockchain technology offers the kind of secure and effective system in functioning and trading of cryptocurrency.
How do Blockchain works?
- Blockchain technology is a key element for the existence of cryptocurrencies and functions as a distributed ledger for cryptocurrency with the application of Distributed Ledger Technology (DLT). It maintains a record of the online transactions conducted using cryptocurrency. Blockchain technology by offering a data structure for the ledger safeguards the system against possible hacker threats and can be synchronized across multiple systems.
- Blockchain being a decentralized, digital public ledger that registers and maintains all the transactions related to cryptocurrencies. Quite an interesting and innovative data storage technology; Blockchain records each transaction as a block and arrange it in chronological order, and that makes it convenient for the users to keep records of cryptocurrency transactions. Once a record or block is created, it cannot be amended or changed. Blockchain copies are automatically downloaded onto all the nodes i.e. computers connected to the network, as an excellent synchronizing feat.
- Going back into the history of Blockchain technology; it was designed and developed as an accounting application for the cryptocurrency named BitCoin. Such a great application of Blockchain technology is that apart from cryptocurrencies, it allows coding, digitization and insertion of literally any document into the secure Blockchain environment. However, the main application of Blockchain technology stays as distributed ledger with keeping track of and verifying cryptocurrency transactions.