Cryptocurrency can be considered as a digital asset that is made or designed to perform digital transactions. These transactions include transferring and exchanging money, where people can keep tabs on their financial records and coin ownership.
The thing that stands out regarding bitcoin is that it cannot be practically forfeited. Any individual can target and protect their coin ownership records without having to cultivate any sort of relationship with other individuals.
How is that possible?
If it works as a source of money, it should be easy to prey on it and take advantage of it, right? However, the tables have turned now – and bitcoin is safe and can be stored through digital means.
What is it that ensures the safety of these assets?
Blockchain – A Ledger Technology!
The digital assets – cryptocurrency – are stored in a ledger – a collection of different accounts that keeps count of the account transaction and record them safely. This ledger is stored in a digital database that uses cryptography to seal the records, control the activity on the coins, and verify the ownership of the bitcoin.
Unlike traditional currencies, cryptocurrency cannot be stored in the form of physical money. Therefore, there is no means of tearing or destroying the money per se. This currency is stored digitally, where it cannot be forfeited, all thanks to blockchain.
The question now is, what is a blockchain?
Blockchain is the medium where records of bitcoins and other cryptocurrencies are kept. It is the list of these records that is always on the rise, growing continuously with time. This list is protected by strong cryptography that helps keep track of any and all activity and maintains the sanctity of the system.
The blockchain serves as a ledger that monitors the transfer of money between two parties and keeps track of the transactions made. Due to blockchain, the process runs smoothly and efficiently and concludes in a verifiable yet permanent way.
Every block of records is connected with the next block. Therefore, it becomes impossible to tamper with the information. If someone tries to make changes to a particular block, they will have to alter the information of every block prior to the one in question.
How Blockchain Helps Operate Bitcoin
Blockchain does not only serve as a list of recorded data regarding bitcoin, but it also helps operate it through the blockchain operating system.
Blockchain not only offers information regarding bitcoin, but it also has a different concept now than before. Cryptographic techniques are being used to develop multiple blocks because of their extensively vast usage.
The distinctive blocks of confidential information are chained together in a block that we all know as blockchain. Once the data is recorded, it is now next to impossible to tamper with. The chronological order of blocks does not allow any individual to change any information.
Bitcoin can only be operated if all the information is digitally stored in the database. Therefore, blockchain greatly impacts the performance of bitcoin in the market through bitcoin cycle.
Theoretically, bitcoin can be forfeited, and its information and recorded data can be hacked. However, it is practically impossible to achieve this goal. Extensive knowledge of computing, an overwhelming amount of effort, and a ton of money is required to tamper with the sanctity of the system.
The cryptocurrency system can be as safe as it possibly can because of the presence of blockchain. Not only does it help protect the information from the hacker with illintent, but it also helps operate the process of transfer between two parties. Operating bitcoin would not have been such an easy task as it is now if it weren’t for blockchain.