13 Misconceptions About Bitcoins & Blockchains

In this article I will briefly go through a few of the most common misunderstandings about the world of finance, specifically with reference to the concept of buying and selling digital currencies. My intention is not to discredit or castigate the potential use of the technology around the internet. Buying and selling digital currencies is a great idea in theory. What I want to do is explain why some people seem to get it wrong.

The first misconception revolves around the idea that the two names are synonymous. It’s true that the name “blockchain” is derived from the term “blockchain ledger”, but this is not the same thing as the transaction mechanism within the system.  You can buy bitcoin in dubai, if you are having an internet connection with a quality investment amount. 

What is really happening is that the ledger is a public database where every transaction that has ever been made on the Internet is logged. Every computer connected to the network copies this information into its own block, or database. What is happening is that every time you make a transaction on the network, the money is transferred into your account, and the transaction is added to the list of the entire chain.

Now, let’s imagine that you wanted to make a transaction from one currency to another. You would enter the details of the sale into the public ledger, and you would then wait until your transaction had cleared before transferring it to your intended receiver. This transaction would be stored on the ledger and would be accessible for anyone who looked for it.

Let’s imagine again that you no longer want to use the network. You would then use a second computer. At this point you could again copy your transaction history onto this new computer. Once it is stored there, anyone who wants to can look at the ledger and see if they match the original data that you stored on one of the old machines.  That’s why people buy bitcoin in London online without getting into much trouble. 

If they do match, the transaction will be added to the new, updated list of all transactions. This process can go on endlessly, matching up one transaction to the next until there are no longer any discrepancies.

This is why many people ask the question: how does the bitcoins & blockchain technology work? The answer to this question is simple. Each new transaction is tracked in a unique way, which ensures the correct accounting. Furthermore, the ledger is controlled by the network itself, which ensures that the transaction history is correct and up-to-date at all times. 

This process is guaranteed to be 100% accurate, as each and every transaction that goes through the system is recorded in its respective place on the ledger.

The process is so complex that it takes a supercomputer to follow it. You have to understand that there are four different blocks in the entire system. The first two, called the main chains, are kept separate from each other. 

These chains each have their own transaction log and are designed to help keep track of the entire ledger. The fourth block chain is called the add-on chains, and this is used to add extra functionality to the system.

If you were thinking about sending a payment to someone else, you would simply add that transaction into the corresponding block in the main chain. Once the transaction is added, it will then be confirmed and then carried out automatically by the network. The whole transaction goes through a series of blocks that are all consecutively numbered. After each block, another proof is required before the transaction can go through as scheduled.

It is important to understand the way the bitcoins & Blockchain system work in order to fully appreciate how it can benefit you. However, it is also vital to realize that the system is not something that can make you rich overnight.  Because now, you can buy bitcoin in UK online. 

It is true that it can be used to reduce the transaction time of your transactions and make it easier for you to get around continents and time zones. But, in order to get the most out of the system, you should become knowledgeable about how it functions.