Blockchain and Cryptocurrency — Back to the Basics
With so many new users joining the cryptosphere, we wish to provide a refresher on the basics of cryptocurrency and blockchain technologies.
Blockchain technology is said to be more of a game-changer than even artificial intelligence, and it is predicted to transform the global economy in relatively short order. Within the next decade, blockchain and cryptocurrency will become a common part of our financial and technological infrastructure. That means just about everyone — from the most analog-happy traditionalists to tech-savvy revolutionaries — will be using cryptocurrency in just a matter of years.
Halo Platform is building a place where anyone can become familiar with how cryptocurrency works and why it’s beneficial for just about everyone. To help achieve this mission, we provide an array of educational content aimed at helping people get to know how the exciting new technology behind digital coins actually works. This includes helpful video tutorials, an informative wiki, topical blog posts and other content aimed at making sure everyone understands what’s going on in the cryptocurrency world.
Blockchain Tech 101
Cryptocurrency and blockchain technology have been around long enough now for the general public to have a basic grasp on how they work. The mechanisms of blockchain technology are a series of successive blocks. These blocks are cryptographically linked together through a verification process run by a decentralized network of users. Each individual block is made up of a few components, but for the most part it’s an unchangeable and permanent recording of a transaction that occurred on the blockchain.
Each block is added to the chain according to a complex computer algorithm that creates something called a hash. The hash acts as a digital fingerprint, and every block of transactions needs an eligible hash to be verified and added to the blockchain. Because this is such an important part of how blockchains work, most blockchains are programmed to reward users who run the hashing algorithms. This reward-based verification system is typically done through mining.
Cryptocurrency Mining and the Next-Generation
In general terms, mining is about calculating the hash value for the newest block being added to the chain. Mining is generally done using a Proof-of-Work (“PoW”) system, which in most cases relies on massive centralized computing power. Using their powerful computers to run hashing algorithms, miners transform outstanding transactions into blocks and add them to the blockchain
Mining may have been among the first ways to power a cryptocurrency blockchain, but innovative entrepreneurs are developing faster, more efficient technology. They’re using this technology — such as Halo Platform’s lightning-fast masternodes — to power blockchain transactions at never-before-seen speeds.
Masternodes are a much faster next-generation technology being used more frequently among the top blockchain tech companies. This may be a direct result of increasing mining difficulty, which is a product of total hashing power. This is what determines how hard it is for miners, in terms of time and power, to find eligible hash for their block and thus reap the rewards. As a result of increasing mining difficulty across cryptocurrency markets, cryptocurrency mining profits are down for 2018.
Using consensus-driven masternodes rather than traditional mining speeds up the block production rate. That’s because masternodes facilitate faster transactions and thus can offer a relatively higher rate of return than hardware mining. Top blockchain networks like Halo Platform are taking advantage of this technology by building masternode systems into their blockchain-powered operations.
Halo Platform supports the cryptocurrency community with regular educational content. To learn more about this exciting new technology, join our community!
Originally published at community.haloplatform.tech.