There is a very small chance that you have already googled terms like “cryptocurrency,” “best crypto exchange Europe,” or “Bitcoin” a few times. However, if you have never done such a thing, it is more than likely that you have no idea what Bitcoin is.
Moreover, you probably do not know what blockchain is and why it is important. That is okay, as it is by no means an easy concept to understand. Still, if you are interested in the subject of cryptocurrencies and would like to expand your knowledge a little bit, we are here to help. In a moment, we will explain what blockchain is and what is its impact on the world.
The Digital Age
Let us start with the basics. In this day and age, you can digitally pay someone who is located in a different country without any issues. The other person will accept your payment and receive their money. The transaction has been completed, and you no longer have to worry about it. You have done your part and can rest easy.
However, just a couple of decades ago, it was impossible to pay anyone who was not physically near you. You had to use a third party to help you with that, and it was very complicated and expensive to go through such a process.
However, blockchain changes everything. It allows you to send money or anything else of value directly to the recipient without the need for an intermediary. The transfer is encrypted and protected from any outside influence.
The technology behind blockchain is decentralized, meaning that data is not stored in one place but on multiple computers at once. The network follows certain rules, and as a result, it is protected from hackers and easy to use.
How Does Blockchain Work?
The blockchain is a growing list of records, called blocks, connected and secured using cryptography. In other words, it is a ledger that keeps growing throughout time. If you want to make a change in the blockchain, you need to verify your identity and the change itself by adding a new block.
For example, imagine that you want to send some money to someone. You encrypt the information and add it to the previous block. The next block contains its verification. You keep on doing this until the transaction is completed.
What Makes Blockchain Unique?
The blockchain network works on a peer-to-peer basis, which means that you do not need to ask anyone for permission to participate in it. It also means that there are not any centralized parties involved with the blockchain network. It is all decentralized, which makes it very secure and reliable.
As we mentioned before, data is stored on multiple computers at once, but those computers are owned by random people who might not even know each other or care about what they are storing. They just do what they are asked to do and get paid for it in return, just like with every other business in this world.
The blockchain network cannot be controlled by anyone. It does not belong to anybody. Even if you would like to take control of it, it will not let you. It is a public ledger that is available for everyone.
However, it needs to be accessed using a public key and a private key. The two keys are paired together, as one key is not able to do anything without the other one. This way, you are protected against any outside influence, as they cannot access your money or anything else of value.
Blockchain Is Reliable
Blockchain technology is very reliable and secure, as it keeps growing and changing with every new block that is added to the chain. Blockchain is also transparent, meaning that anyone can see what is happening on it. You can even track transactions if you want to.
As blockchain gets bigger and bigger, you can tell that it is going to be very big in the future. It has already made several companies rich because of its incredible potential. It is only a matter of time before other companies start using blockchain technology for their benefit.
How Is Blockchain Changing Digital Currencies?
Blockchain makes digital currencies a whole lot more stable and trustworthy. Even if you are just starting your trading career, you already know that cryptocurrencies are volatile. However, thanks to blockchain, this volatility becomes a thing of the past.
Blockchain works as a ledger and allows you to track the transactions that you have made with cryptocurrencies. When you do that, you can be sure that your money is secure. You also know that your transaction has been made correctly, and there is no way for anyone to manipulate it or change its course. Blockchain makes everything safer and more reliable.
In Conclusion
Blockchain technology is revolutionary. In fact, it is changing the way we store data and payment information. Moreover, it is very convenient, as it makes it possible to transfer money around the globe for a fraction of the money that we normally spend on such transactions.
