Understanding The Basics Of Blockchain TechnologyBy: Fabian Rictor, Wednesday April 4th 2018
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One of the latest buzz terms going around is blockchain technology. Players at online casinos who use bitcoins, or who are aware of it, probably know that blockchain technology is the bedrock of virtual currency. But very few would know exactly what blockchain technology is and how it operates. This article tries to explain this complex phenomenon in a simplistic manner.
Virtual currency transactions are recorded in virtual ledgers, with each transaction being recorded in a block. A block will contain four pieces of data: a time stamp, a summary of the transaction, a reference to the previous block, and proof of work. Before the block is entered into the ledger it has to be verified as being correct. The equations required for this verification are purposefully difficult to solve. Also multiple nodes on the network have to carry out independent verification. Verified blocks are strung together on a chain, giving the technology its name. Each block is then securely hashed to prevent later editing or removal. In simple terms, once the block is on the chain it is impossible to alter or remove.
Each node is a bitcoin miner’s computer. A bitcoin miner is a computer owner that processes the bitcoin transaction in the way described above. The miner is paid in bitcoins for the service, which is how bitcoins are generated. Every new transaction is transmitted to every node in the chain in a peer-to-peer way. This ensures that the data can never be lost. The blockchain system is totally open-source and public so, though it cannot be altered, it can be accessed. It is completely anonymous which allows for individual security.
A question the discerning reader is bound to ask is how is it decided which miner will process a bitcoin transaction, because no one really knows how many miners are in the business. The transactions are programmed to create a puzzle. Computations and algorithms are used to solve it. The solution involves determining a new prime number. The first miner to determine the problem’s unique number gets to batch the transactions. A confirmation mechanism is in place that prevents the processing of the same transaction twice.
The online gaming industry is looking at blockchain technology for more than bitcoin transactions. The Gaming Standards Association has launched a Blockchain Committee to look into various possibilities in areas of data sharing, security and providing regulatory authorities with high levels of transparency.
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