When digital currencies first arrived on the scene, the concept of blockchain was born. Since then, this term has been replaced with the term “digital ledger.” The reason for this name is that the blockchain is exactly that, a digital ledger.
If we consider traditional accounting principles, double-entry bookkeeping has a party and a counterparty in every register. Therefore, the blockchain uses this system to keep track of transactions. However, it takes this concept one step further by adding a third party who is in charge of verifying every transaction. In a manner of speaking, it’s like having two friends agree on a bet and then having a third friend witness the agreement.
In this exact manner, the blockchain is able to ensure that every transaction is fully transparent. In order to conduct a transaction, both parties must be registered and verified users.
This means that there are no anonymous individuals who can pretend to be someone else. If you are not verified, you cannot deal with official cryptos.
Furthermore, the third party, which certifies the transaction, must also be duly verified. This is what gives credence to the verification process. Once the transaction has been completed and verified, it is registered on multiple servers throughout the world. Thus, there is no centralization of data. If a user wished to erase a transaction, they would have to erase all servers on which the transaction was recorded. This is virtually impossible, as knowing the exact number of servers is quite difficult. Plus, all data can be quickly copied on to additional serves. As such, anyone wishing to erase transactions would need to shut the entire internet down, scour every possible server for records, and then delete them. But then again, anyone with a copy on a hard drive that is not connected to the internet could simply upload them again.
