Apr 27
What is a blockchain? — A beginners guide .
A blockchain is at the heart of all cryptocurrencies. When cryptocurrencies are bought or sold on a crypto exchange or via p2p, they must be confirmed and added to a new block in the blockchain. This ensures that copies of it exist on different computers worldwide. This is because blockchains are decentralized, and no one can decide to delete a transaction or shut down the whole blockchain. It would be like trying to delete or destroy the internet.
Although the decentralized technology is mainly used by the crypto industry, it has a lot of potential for other fields as well.
What is a blockchain?
By definition, this is an unchangeable decentralized ledger that stores data for a cryptocurrency network. It doesn’t matter the nature of the data; if it exists in a crypto network, it exists on the blockchain.
The blockchain is decentralized, meaning that there is no central authority that monitors or controls it. Think of it as a spreadsheet that everyone can see, but no one can edit or rearrange.
How does a blockchain work?
The term blockchain is used literally. As the name implies, a blockchain is a collection of blocks chained together to form a library of information. When a transaction is made on, let’s say, the Ethereum blockchain, it has to pass through a verification process. This is done to ensure that the data on the blockchain isn’t fake. Once this has been verified, the information is then added to a block and added to a blockchain.
4 Uses of a blockchain
There are several uses for a blockchain, such as:
Cryptocurrency: Blockchain technology was designed to work alongside cryptocurrencies. Bitcoin, Ether, and USDT all have to exist in the blockchain network for them to function as they are meant to. This is what gives them the decentralized attribute. Otherwise, they’ll be like any other fiat currency.
Transfer of assets: You can use a blockchain to record and transfer assets such as NFTs, digital currencies, and many more. This isn’t just limited to digital assets, some real-world assets like vehicles, real estate, etc., are also in this list. Many companies have started adopting blockchains in their businesses.
Smart contracts: Another innovative feature of a blockchain is its ability to host automated contracts. Smart contracts are contracts that self-execute immediately after certain conditions have been met. You can read our in-depth article on smart contracts by clicking here.
Voting: Some experts believe that the decentralized ledger technology could be incorporated into the governmental voting system to reduce fraud and other malpractices. Since the blockchain is immutable, it would stand as a more valid platform for voting statistics and information.
How to get into blockchain technology
You can’t invest in blockchain technology since it’s just a system for storing data or information. However, you could decide to put money into technologies or projects that run on blockchain technology.
Many people have started seeing the benefits that come with using cryptocurrencies. On ValorExchange, you can save with your cryptocurrencies if that’s what you want, but you can do much more. You can make payments, transfer funds across countries, learn crypto from scratch and loads more when creating an account on the platform. It’s free, easy and straightforward with ValorExchange.
