Why cryptocurrency transactions are so secure?
Today I am going to talk about its core mechanism – public ledger and how it works since the concept of a public ledger, or blockchain, is something you must fully comprehend if you are into cryptocurrency business.
There is an age-old record-keeping system that was used to record information like agriculture commodity prices and other details. It was available for general public viewing as well as for verification.
A public ledger derives its name from the system as cryptocurrency-based blockchain systems relied on a similar record keeping and public verification mechanism. Thus, public ledger started to be used in cryptocurrency field also.
How it works
This mechanism you can compare with core of Google Docs where all files are stored in public cloud where everyone can access it, edit it, can see all changes, and there is no need to send, resend and edit multiple times as all changes you can see in real life.
The public ledger keeps participants’ identities in secure and (pseudo-)anonymous form, also their cryptocurrency balances, and a history of all the genuine transactions executed between all participants.
Transaction details on a cryptocurrency public ledger can be verified and queried by the two transacting participants. But there is no central authority and other network participants can see the participants identity. Transactions are allowed and recorded only after suitable verification of the sender’s liquidity, otherwise, they are discarded.
Security and zero risks
Distributed ledger is necessary to uphold the transparency of the network, having built-in safety features. All of the information on the Bitcoin ledger is distributed equally across the network of computing power. Because of this even distribution, there can never be a single entity controlling the entire network, and there can never be a single entity capable of taking the network offline.
As a block is filled to capacity with transaction details, new ones are mined and are added to the blockchain by miners. A combination of the various intrinsic features of the public ledger, like consensus algorithm, encryption, and reward mechanism, ensures that the participants’ identities are protected, and only genuine transactions are carried on the network.
Even if one server crushes, blockchain will continue its work – the distributed nature of the network means that even if one or two computing entities go bust, there are literally millions of others still operating, keeping the network afloat.
If a hacker tries to steal bitcoins it would be nearly impossible because the information on even a single user is spread across millions of computers, not in a couple of servers like where banks or companies keep their data.
What do you think about security of cryptocurrency? Share it in the comments below! If you have your question, please write it below, I would be glad to answer your questions or to introduce your project to my team at Astorts Group to be evaluated.
Alessandro Rocco Pietrocola is an entrepreneur and investor based in London and operating mainly in Europe, Asia and Oceania with main focus on UK, Baltic Countries, Russia, China, Hong Kong, Malaysia, Singapore, Middle East and New Zealand as area of interest! At the moment is the CEO of Astorts Group. He is an UK FCA (Financial Conduct Authority) Approved Person and is has great experience as director of regulated companies. He uses to dedicate part of his life to inspire others and help them achieve the most out of their life. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.