Blockchain & Cryptocurrency are the two new tech trends that everyone wants to learn. However, they come with their own complications. Have you been into banking and finance lately? Perhaps you’re trying to save up for college but don’t know the first thing about investment to get started with crypto?
Sometimes, the tech part of both these terms is inherently difficult to understand. That’s where we come in. The best part is that when it comes to blockchain and cryptocurrency, you can never be too late.
Today, we are going to have a brief look at what Blockchain and Cryptocurrency are and why they are all the rage right now. Let’s get right to it!
What is Blockchain?
Blockchain can be defined as a certain type of database. It’s different from a normal database in terms of how it stores information. If you were to imagine a blockchain visually, it would look like a flowchart; and that’s exactly how it works. Blocks of information and data are stored together in a chain-like format.
First, let’s look at what a database is. Database, in simple terms, is the storage of information electronically. Think of it as a spreadsheet, but for a large number of people to understand instead of being focused on one person. A blockchain database can store heaps of information securely.
Blockchain, as the name suggests, is a chain of databases connected to each other. As new information starts coming in, new blocks of the database are created. When the information is stored in the database, it forms a block and attaches itself to the previous chain of blocks.
In finance and cryptocurrency, blockchain is used like a ledger, i.e., a digital cash register. Instead of cash, it stores information about transactions taking place. Blockchain is used in a decentralized manner to make it available to everyone instead of leaving the power in the hands of a private entity, like a bank.
When it comes to blockchain, especially in Bitcoin’s case, the power lies with the users. The users control what’s entered into the database. One thing to note here is that once the information is updated, it can’t be changed or tampered with. This is perhaps the best part of using Blockchain because it uses high-security trends to keep the information safe. Furthermore, it uses two-factor authentication to make the user’s information relatively less prone to hack attacks.
Now, let’s get to cryptocurrency.
What is Cryptocurrency?
The term cryptocurrency refers to a digital asset that can be used to make secure payments. The world’s history of financial transactions goes back to the barter system where you could trade one commodity for another. The concept behind cryptocurrency is more or less the same.
However, the reason it’s called cryptocurrency is because of the cryptography and encryption technology used to protect the nature of transactions. Cryptocurrency uses a special type of encryption to protect the integrity of the transacted data and all of its information.
The transactions are recorded through Blockchain technology. As we mentioned earlier, Blockchain is a distributed ledger across a large network of computers. It stores transactional data and protects it from any hack attacks. The greatest part about Blockchain is that it’s decentralized. This means that it’s more user-oriented, and people can access it whenever they like. Furthermore, they can be used for transactions.
Cryptocurrencies like Bitcoin, Litecoin, and Ethereum are soon looking at a future where they might be accepted for buying simple commodities like milk. However, that future is too far to indulge in. Plus, there’s only one way to find out, so stick around!