US cryptocurrency company Nomad, ZB Exchange, and Solana wallets share something in common. This year alone, they’ve been victims of significant cryptocurrency heists worth more than $190 million.
With these facts, It’s safe to say that losing your cryptocurrency to theft as an investor is a significant concern. According to the Coin Dispute Network, a firm whose sole purpose is to assist crypto fraud victims in retrieving their funds, they can track stolen cryptocurrency through the blockchain.
What is Blockchain?
Blockchain is a distributed ledger system that prevents hacking and data tampering, making it ideal for archival purposes.
It is a digital system for simultaneously recording transactions and related data in several locations, and it belongs to distributed ledger technology (DLT) category. To eliminate the possibility of a “master” copy of the ledger being compromised, the network ensures that all computers in the network constantly update and validate their copy of the ledger.
If you’re familiar with databases, you’ll know that blockchain is a database, too, although it operates very differently. In contrast to conventional databases, which organize information into sequential blocks, blockchain stores information in digitally linked blocks. In addition, unlike conventional databases, a blockchain is not housed on a single server. Still, it is controlled by a distributed network of computers.
How Does the Blockchain Work?
The blockchain system is quite complex. Initial steps require a trusted party to enter a transaction for verification by the system. This process generates a new block to store the relevant transaction or data.
Another successful recovery here at @CoinDisputeNet !
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— Coin Dispute Network (@CoinDisputeNet) September 11, 2022
This block is broadcast to all of the network’s computers. Once authorized nodes have verified the transaction, the new block is added to the blockchain. Miners are nodes in public blockchain networks; they are compensated for their efforts in bitcoin via a mechanism known as Proof of Work. The transaction is completed after the update is broadcast to all nodes.
The basic building blocks of a blockchain ledger are the transaction records and the blocks themselves. The first block includes transactional data and a header for the preceding time interval. A hash is a string of alphanumeric characters, and its creation is aided by the date on the block.
Each new block in the ledger is calculated using the preceding block’s hash once the initial block has been established.
How the Blockchain Can Help You Track Your Money
Many financial frauds exist because of the limitations associated with sharing information among market participants. Every organization maintains its database and does not collaborate with databases owned by other businesses.
Algorithms in a consolidated database could help eliminate fraud across industries. It enables the identification of persistent offenders, recurrent allegations, discrepancies in data, and other telltale fraud indicators. The blockchain provides that database and makes it easy for transactions to be tracked to the wallet accounts that receive them, and as a result, a way for Coin Dispute Network to track down cryptocurrency scammers.