To understand this information, you will have to work a little with your brains, but I will try to simplify the story for you as much as possible and explain the meaning of the word cryptocurrency in plain language. This is a type of digital currency or, one might say, digital cash, the control of which is based on cryptographic methods. As a rule, currency accounting is decentralized, which means that exchange rates on accounts are deprived of control by the government of the country or even the world, as well as not subject to any central bank. It is also impossible to seize by any judicial or tax authority, due to this the possibility of calculating cryptocurrency between people contributes to the complete anonymity of both the payer and the recipient of funds.
This method of payment has spread in the shadow Internet market and not only. Transfer of digital currency is an irreversible process, that is, if you gave money to someone by mistake or an unscrupulous partner, then you can’t get anything back, unless you have agreed on the conditions before the transaction. This term was fixed after the appearance of the first official Bitcoin cryptocurrency.
What is Blockchain technology – in simple
The functioning of the entire system is possible thanks to Blockchain technology. This is a technology that allows you to make information storage almost 100 percent safe. If it’s possible to crack this system, then certainly not a lot of people on the planet. The essence of the technology is that information about all wallets and transactions consists of a chain of blocks arranged according to certain rules and in a continuous sequence. To change the information in the block, you have to edit all subsequent blocks. What makes this process extremely difficult, since copies of these blocks are stored not only on your computer, but also on the computers of all participants in the system.
For example, imagine you have a wallet with a hundred dollars on your balance. It would seem that to increase your balance, for example, ten times, it would be enough to copy your wallet 10 times and get a thousand dollars. But it will be impossible to do this with Blockchain technology, because the blocks on your computer store information not only about the balance on your wallet, but also about all the blocks in the system and their connections.
The blockchain is a sequential chain of blocks that are connected by a unique key and each block has its own hash, which is summed throughout the chain and written to each block, which makes it impossible to replace or copy one block. If this is done, then the common hash will not converge and the block will not be accepted by the system.
Replacing the hash of an individual block or obtaining information from it is almost impossible, because there are two most difficult levels of protection and verification. We do not know what is inside the block, but we know what it has on the outside. That is, information about all incoming and outgoing transactions is available to everyone. Having all this information, you can approximately calculate the balance of your wallet, which may consist of hundreds or thousands of such blocks. You won’t be able to get accurate information, because your wallet can also be replenished with the help of mining transactions, where the commission is not monitored.