What is the blockchain technology behind cryptocurrencies like Bitcoin and Ethereum?

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Volatile cryptocurrency markets have experienced massive gains in recent months, followed by huge dips and then subsequent signs of recovery.

USA (Next Media) – Volatile cryptocurrency markets have experienced massive gains in recent months, followed by huge dips and then subsequent signs of recovery.

Blockchain is the technology that underpins cryptocurrencies like Bitcoin and Ether. A blockchain is a digital database managed by a decentralized network of computers. The blockchain records transactions chronologically and publically, according to online blockchain resource, Blockgeeks.com.

Distributing data through a peer-to-peer network hosted by millions of computers makes it far less vulnerable to hackers than a centralized network and protects files from getting lost.

When a user requests a transaction on the blockchain, it is broadcast to the peer-to-peer network of computers, known as nodes. The nodes validate the transaction then combine it with other transactions to create a new block of data for the digital database.

That block, which is both permanent and unalterable, is then added to the existing blockchain and the transaction is completed.

Probably the most well known type of blockchain transaction involves cryptocurrencies such as Bitcoin or Ethereum, which has a value token called Ether.

Blockchain technology can also be used record transactions for digital information such as contracts, or records like land rights and medical files. It may also have a huge impact on the Internet of Things.

According to CNBC, recent drops in the cryptocurrency markets have been driven by profit-taking after Ethereum’s exponential surge, uncertainty about a potential split in Bitcoin on Aug. 1 and startups selling large amounts of Ethereum after raising millions in U.S. dollars of the digital currency.


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