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6 months ago (21/01/22) 356 Views

How Blockchain Works?

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You must have heard the name of blockchain? Do you know what the blockchain is all aboutHow does it work? If you haven’t heard or know in part then this article is for you.

From where you are reading this article today, I hope everyone is physically and mentally healthy. I am starting today’s article wishing everyone well.

How Blockchain Works

What is blockchain technology?

Blockchain is basically a method of storing information, in which it is almost impossible for the stored information to be lost, distorted or stolen. Blockchain is one of the most secure data storage methods discovered in the world today. Blockchain is like a network. Breaking the word blockchain gives two words. One block and the other chain. The blockchain is simply a chain. A blockchain network is created by combining many blocks. Each block is made up of data.

How does blockchain technology work?

Blockchain is an open source method. It does not control any particular person or organization. And because every block is connected to each other, blockchain is such a secure method. Notice the image below to understand the blockchain.

Blockchain Works

Each block contains data, and a hash is created from that data. The hash of each block is unique . That is, the hash of one block will never match the hash of another block. Block hashes can be compared to human fingerprints. Just as the fingerprints of every human being in the world are different, so is the hash of each block. Again a block is added to the hash of its previous block. Notice in the image above, the hash of Block1 has been added to the next block, again the hash of Block2 has been added to the next block i.e. Block3. In this way it is almost impossible to hack the blockchain system as the hash of each block is attached to the next block.

To illustrate the point of blockchain, let’s use an example. Suppose you and your friend Rahim both use blockchain systems. Now you want to send 500 dollars to Rahim through blockchain. This information will not be kept secret between you and your friend only when you send 500 dollars to your friend. The more computers connected to the blockchain network, the more your money (or information) exchange information will be lost on all the computers. So if someone wants to hack you or your friend, Rahim’s account and change the data, then he can’t. Because, the information of your transaction is in the account of others (computer). It is impossible for a hacker to delete data from all accounts.

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In which sector blockchain is used?

Currently blockchain is most used in the finance sector. Bitcoin transactions are done through blockchain technology. On January 3, 2009, Satoshi Nakamoto and Hale Feni were the first to use Bitcoin or BTC transactions using blockchain technology.

Bitcoin and transactions

There is a lot of talk about digital currency called ‘Bitcoin‘. The main reason for this is the record increase in the value of this currency. Although experts warn about this, people are inclined towards it at a huge rate. Sometimes hackers hack into computers and demand money and pay for claims made through ‘Bitcoin’. Without it, the unlimited use of this centrally uncontrolled currency in illegal and immoral activities could at any time lead to a global economic crisis. So its rush should be pulled immediately. It is necessary to take utmost care in this regard as well as be aware of the point of view of Shariah.
The term Bitcoin means small currency, symbolic currency, digital or virtual currency. It is called ‘Bitcoin’ because it is made up of tiny computer data. Bitcoin is also called cryptocurrency. Because unlike other conventional currencies, it has no value of its own and its existence, size or existence is not visible. Rather, it is a virtual token created in a symbolic form in a special process, created as a medium of exchange. So it does not require any kind of base, pocket or wallet to carry or store; Rather these are stored in different wallets.

In fact, the whole process of creating Bitcoin is done online through an open source software. The one on whose server the transaction process is secured is called minor. Miners make ‘bitcoin’ through mining. New ‘Bitcoin’ is generated as soon as a transaction is completed. Bitcoin is transacted from customer to customer’s computer.

In our country, when buyers buy a product in various department stores or supershops including ‘Swapna’, they are given a certain point based on the purchase price. Suppose the point is a virtual token. After reaching the specified amount, the buyer can purchase any product against that point. In other words, this point has been accepted as a kind of currency or medium of exchange. Bitcoin concept is much like this or close to it. A point or number, which is earned after mining; It has been given special status as a medium of exchange for the purpose of attracting mining. Its price increases or decreases according to the demand.

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A few more virtual currencies: Inspired by the success of Bitcoin, more than a thousand more virtual or digital currencies have been created. Some of the most widely used and successful currencies are Ethereum, Ripple, Lightcoin, Alt Coin, Swift Coin, Byte Coin, Pear Coin, Doge Coin, Grid Coin, Black Coin, ZCash, Bitcoin Cash, Omni Stellar, XRP, Cardeno, etc. . Etherium: Etherium was launched in 2015. Like Bitcoin, it has its own accounting system. Bitcoin is second only to Bitcoin in terms of popularity and exchange rate. As of last December, the market capitalization of this digital currency was about 67 billion. In 2016, the coin was hacked once. As a result, each Etherium coin sold for 10 cents. Ripple: Ripple was launched in 2012. Not just cryptocurrency,Rather, other types of transactions can be done in this system. Various conventional banks are also transacting in this digital currency. Ripple Cryptocurrency currently has a market capitalization of about 10 billion. Lightcoin: Lightcoin has a great resemblance to Bitcoin. This digital currency is already gaining popularity as it can be traded faster than Bitcoin. It currently has a market value of about 5 billion.

Security: Using high technology, all bitcoin data is stored in a number of minor lasers. In order to hack, you have to destroy the computers on which it is stored. It is very difficult but not impossible. Miners who store bitcoin have already suffered losses as a result of several different virtual wallet hacks. As a result, the prices of some virtual currencies have plummeted.

The demand and price of Bitcoin is growing uncontrollably. In March 2016, the exchange rate of one coin against the dollar was  419.75 dollars , but at the beginning of this year, the exchange rate was 14317.8. Its price is increasing almost every day. Prices have almost quadrupled in the last year and a half. The price of a bitcoin in Bangladeshi rupees is now around 12 lakh rupees. Users themselves do not know the exact reason for this unusual exchange rate increase.

Investors will inevitably face severe financial losses if the people involved in bitcoin mining suddenly withdraw from the market as the currency is widely ‘fluctuated’ and has no regulatory body. But it is not possible to compensate legally or in any other way.
However, in the wake of massive transactions in these currencies, some governments of the developed world, including the United States, Canada and Japan, are considering bringing this monetary system under central control in order to collect huge amount of revenue. The Iranian government initially banned the transaction, but has now declared it legal.

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Bitcoin and Mining: The word ‘mine’ means mine. Mining is called mining by extracting valuable resources by digging soil or mines. The one who does mining is called minor. Since the method of making bitcoin is very much like extracting resources from mines, those who get bitcoin by solving special algorithms are being referred to as minors.

Bitcoin Transactions: As Bitcoin is generated, it is stored in the customer’s digital wallet. If the stored bitcoin is sent by the customer to someone else’s account, a unique electronic signature is created for this transaction, which is monitored by other miners and stored secretly but securely within the network. At the same time the current ledger of the customers is also being updated.

When a product is purchased with Bitcoin, it is sent to the seller’s account and the seller can purchase the product again with that Bitcoin. On the other hand, an equal number of bitcoins are deducted from the buyer’s ledger. The total number of bitcoins is redefined every four consecutive years to keep up with the real currency. Bitcoin transactions do not require any financial institution, so its transaction movements cannot be followed in any way. This is why bitcoin transactions are becoming so popular in different parts of the world.

Illegal Transactions: Since the information of the sender and the recipient is stored anonymously, it is possible to carry out various anti-state and anti-Sharia activities including importing and exporting drugs through Bitcoin, illegal arms trafficking, money laundering or tax evasion. This is why the use of Bitcoin has increased alarmingly in the case of illegal transactions as well as legal transactions. According to an Australian researcher, the rate of illegal activity through Bitcoin is around 50 percent.

Bitcoin Collection: ‘Bitcoin’ is collected by mining or purchasing. Mining that or those who collect bitcoin, others are meeting their needs by buying it from them in cash. However, these two methods are quite risky. Because, in both cases there is a huge scope for fraud and deception. In doing so, many have been deceived and suffered huge financial losses.


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