Importance Of Blockchain Is A Natural Auditing System
Decentralized virtual currencies are developed on a base technology called Blockchain. This is a mechanism that prevents the double use of coins that are, at heart, electronic data, so if used correctly, security is guaranteed. Although there are some technical issues with Blockchain, improvements are constantly progressing.
Bitcoin and Ethereum, which could be considered the precursors of decentralized virtual currencies, are not managed by operators but by a coding program called Blockchain. It is designed to work correctly even if there is no operator in the center, and the value expressed as currency cannot be used twice and only the person who has the private key can move the currency. BitcoinEvolution is the best software for Bitcoin trading.
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Also, the important thing about securely managing virtual currencies is a technology called multiple signatures, or “multi-sig”, in which the value cannot be transferred unless you have two or more keys. To use Bitcoin, install a virtual wallet software on your smartphone, but only the private key will be there. The unused UTXO balance is recorded by computers called nodes, which are distributed all over the world.
There are about 11,000 nodes in the world that share all transaction records. On the other hand, the value of the coin can be transferred if you obtain the private key, so you could be the target of cyberattacks. Since it is very difficult to protect a machine in a general environment from a professional cyber attack, the use of multi-sig technology is an advanced defense.
In general, when you open an account with a virtual currency exchange service, it sets up a web wallet and displays the Bitcoin address and keeps a record of your transaction history. This allows users to check if the transactions they have made are correct, and multisig guarantees the security of private keys that, without this technology, would not be protected.
However, more recently, instead of using multisig to give users Bitcoin addresses, exchange services tend to set up collective accounts for clients and operate them as exchange account transactions. Although it is efficient for exchange, users cannot see the transactions they have requested on the Blockchain corresponding to their private keys.
Blockchain Is A Natural Auditing System
Even if the audit firm does not investigate anything afterward, the audit ends when the transaction is made on the Blockchain. The multi-sig mentioned here is an example of Blockchain technology, but there are other proposals to improve security. It can be said that the aforementioned tragedy is caused by the fact that the upgrade should be used, but it is not.
It is said that by developing an economic and social platform using Blockchain, an autonomous smart economy will be created that minimizes human participation. This is called the Blockchain economy.
The decentralized public cryptocurrency Blockchain is designed so that once it starts, no one can change it. It is an engine, or a chronicle, that operates according to the rules but without human intervention, do you think that it is fine to handle the part of the payment service as such.
It is expected that the platform that provides the Blockchain-based service will not exist independently of the front-line payment services, but it will be extended as an integral part. This is because although there are no referees in the middle, that is, people who do not know they are, they carry out economic activities according to their contracts.
During the first half of the year, virtual currencies became a popular topic due to their increasing diffusion. There are various types, such as Bitcoin, Ethereum, and Ripple, and the volume of distribution keeps increasing. In 2017, the first billionaire emerged to earn incredible wealth by investing in virtual currencies.
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