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WHAT IS THE “BLOCKCHAIN?”
The Cryptocurrency Term Defined
T he word
Thanks to this hash, previously added blocks cannot be modified in any way. You can only add new blocks. The use of mathematical, chained algorithms is what makes verifying transactions simple, subsequently making fraud detection relatively easy and prevents fraudulent transactions. In short, if someone tries to manipulate that blockchain in any way, changes to the hash can be identified and the manipulation stopped. This process makes cryptocurrency secure. Blockchains are not just useful for cryptocurrencies. Because they are a secure way to record data, blockchains are used in a number of different industries, including retail and shipping. In 2017, The New York Times reported that Maersk, one of the biggest shipping companies in the world, began using a blockchain to track various goods transported on its ships. It gives the company an accurate and instant picture of what is on ships and in port. They can track goods anywhere in the world in the blink of an eye. The blockchain adds a level of security to shipping and makes global shipping more efficient, which can have a positive environmental impact. If you are still scratching your head when you read about blockchains, it’s understandable. It’s a complicated topic, but it is becoming more mainstream. In the coming years, blockchains will be commonplace. As more businesses implement their own blockchains, it will be easier to understand. Eventually, education related to blockchain and data security will become the norm.
“blockchain” has become commonplace
in the financial, investing, and business worlds. When you read an article about bitcoin or any other form of cryptocurrency, you will likely see it several times. We know the blockchain
is an important component of every cryptocurrency, but what exactly is it?
Fundamentally, a blockchain is a record system. It is a shared public ledger of every single transaction made using cryptocurrency anywhere in the world. Blockchains are accessible by virtually everyone but not controlled by anyone unless it is a private blockchain, such as those used by businesses.
The individuals or businesses who use any given blockchain — that is to say, they make transactions — are responsible for maintaining that blockchain. They keep it accurate and up-to-date. This happens whenever a transaction is made, whether it’s the purchase of goods or services or a currency exchange, such as dollars for bitcoin. To that end, every single transaction is recorded in a data “block.” Every block holds the verified transactional information. With each subsequent transaction, the block grows, and eventually a new block will come into existence. This is programmed into the blockchain to happen automatically. When that happens, the blocks will be digitally “chained” together. This is where the cryptographic nature of cryptocurrency comes into play. With every new piece of the chain, mathematical data called “hash” is added.
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