What is Blockchain and How Does It Work?

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Blockchain is a way of storing data digitally that is interconnected from one device to another. The development of this technology is popular because it is widely used.

The use of blockchain itself is inseparable from cryptocurrency, although there are actually many other fields that use this technology. One of the reasons why this technology has so many users is that many people think the system is more transparent, as well as being profitable.

Curious about the full explanation of blockchain? Listen below, yes!

Understanding Blockchain

Judging from the name itself, this blockchain consists of two words, namely block which means group and chain which means chain.

If you look at the two words, then the understanding of blockchain is a group that is connected to each other like a chain.

Blockchain itself is a digital data storage technology whose storage media will be connected to each other. The data stored can also vary, depending on the needs.

How Blockchain Works

A brief explanation of how blockchain works is where one device will be connected to another device to record and check each other's data.

The most frequent and popular use of this technology is in crypto.

For more details, the following is the flow and workings of this blockchain technology:

. First, a store accepts payments via Bitcoin.

. Then, came the customers who wanted to buy and pay using Bitcoin.

. The shop owner gave his wallet address. Then the buyer makes a payment to that address. The transaction took place.

. This transaction will be sent in the form of a request which will later be sent to the account of the Bitcoin miners. Bitcoin miners themselves are people or groups who have special devices to perform mathematical calculations of every bitcoin transaction. They are the part of the block and will form the chain.

. The miners will calculate the value of the newly sent Bitcoin based on the existing combinations and conversions.

. After getting a value, a new block will be created. This block will later be used as a place to store transaction data between the buyer and the shop owner.

. After that, the transaction will be verified. And the number of Bitcoins in the shop owner's wallet will increase.

Blockchain Advantage

As an innovation, this technology does have several advantages.

With a system in which each block can check each other, the possibility for errors to occur is even smaller.

In addition, several other advantages of this blockchain technology include:

1. More Transparent System

One of the advantages of this technology that makes it has many enthusiasts is that the system is more transparent.

This comes up especially in crypto matters.

Every transaction that uses blockchain technology can be seen by the general public.

The public can freely check every transaction that occurs. Those who can check are even more free because they don't need to have access to login.

Such a system also makes any coin belonging to a person unable to be used for any needs without the knowledge of the owner.

2. Better Protection System

In many existing systems, blockchain is considered to have a more secure system structure.

This also makes the protection for data stored using the blockchain even more secure.

In its application, this blockchain technology uses a verification system by miners or miners before the data or transaction goes to the next process.

Even if you look deeper, this part of the database structure of the blockchain only has features for adding data and no features for editing.

In the absence of an edit feature, this means that no one can change the data.

Thus, the potential for hackers to enter is smaller.

3. Better Audit System

If you look at the two previous advantages, then this will also result in a much better audit system.

This is also one of the advantages of blockchain technology.

When everyone can track and view all transaction data, auditing can also be done more easily.

In addition, the potential for data loss is also smaller.

This is because the database can only add data.

The database cannot be deleted and there is no feature to edit or change data.

Blockchain Characteristics

In addition to the problem of excellence, this blockchain also has several characteristics.

These characteristics include:

1. It is Open Source

Blockchain is open source.

That means, everyone can be involved in this.

As long as he understands about the system and the developer then he can be involved in the use of this technology.

Later, that person can also participate in verification, see how much supply, see potential for inflation, and others.

2. Not Centralized

Blockchain is a system that is diffuse, or not centralized.

So, no one person or institution can control it.

This is because the codes used in this technology are not stored on a single server.

The code is spread across thousands of interconnected devices on the blockchain network.

In fact, if you want, you can also be a part of the application.

3. Clear Inflation Rate

When it comes to using this technology for cryptocurrencies, one thing that cannot be avoided is inflation.

However, with the use of this technology, the data on the inflation rate becomes clearer.

This is because you can clearly know how much supply there is, and how much demand there is.

With clear data regarding this matter, the data for the occurrence of inflation becomes more accurate.

4. Can't be deleted

Any transactions that have occurred on the blockchain cannot be undone or deleted.

That's because systemically, this technology will only be able to add data and cannot delete or make changes to data.

This can also reduce the potential for hackers to enter because no data can be retrieved or changed.

Blockchain Usage

Of all the advantages and benefits that this technology provides, most of its use is for financial purposes, especially cryptocurrencies.

The use of this technology is considered much safer and more efficient.

In addition, several other uses and uses of this technology include:

. Speed ​​up and simplify payments.

. Reduced costs required for admins.

. Improve the security of data management funds.

. The existence of transparent data from each transaction.

. More durable data.

Those are some of the uses of this blockchain technology.

Currently, there are even many people who are involved in the use of this technology.

Most of them use this technology to become miners or crypto miners.

This technology is quite profitable for many people.

So that the application becomes quite a lot and massive.

Therefore, it is not impossible if later this technology can be used in various fields.

Currently, blockchain technology has not been implemented in Indonesia, but in fact many Indonesians are literate about virtual currency, even making it an investment.

However, if you are a beginner who doesn't understand how to invest in cryptocurrency, you can run other investment alternatives such as funding in KoinP2P from KoinWorks because the fundamental process is similar.

By funding at KoinP2P you can get returns of up to 18% per year, you know.

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