How blockchain is used in cryptocurrencies

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Blockchain is the technology that underpins most cryptocurrencies, including Bitcoin, the first and best known of these digital currencies. Blockchain is a distributed ledger technology that targets decentralization as a security measure. These are distributed and shared databases of records and data that have the function of creating a global index for all transactions that occur in a given market.

In other words, Blockchain is a type of database that stores information in blocks that are chained together. Each block contains a specific number of transactions. Once a block is full of transactions, a new block is created and linked to the previous block. This is the origin of the term "blockchain".

One of the most notable characteristics of Blockchain is that it is a "trust" technology. This means that transactions are verified and validated by the network itself. This is done through a process known as mining, where computers on the network compete to solve a complex mathematical problem. The first one to solve the problem has the right to add the next block to the chain and is rewarded with a certain amount of cryptocurrency.

Security is one of the main advantages of Blockchain. Once a block is added to the chain, the information it contains cannot be changed or deleted. This is because each block contains a reference to the previous block in the form of a hash code. If someone tried to change the information in a block, the hash code would change and the network would know something was wrong.

Moreover, Blockchain is a decentralized technology. This means that there is no central authority that controls or manages the network. Instead, every user on the network has a copy of the blockchain, making it nearly impossible for a single user or group of users to take control of the network.

Unlike traditional banking systems, which are closed and controlled by a single entity, Blockchain is open and transparent. Anyone can see all transactions that have ever been made. This makes Blockchain particularly useful for cryptocurrencies as it allows users to verify that a transaction was made and that funds were transferred correctly.

As far as cryptocurrencies are concerned, Blockchain serves as a public ledger that records all transactions of a given currency. For example, in the case of Bitcoin, each time a user sends or receives Bitcoin, the transaction is recorded on the Bitcoin Blockchain. The transaction includes the amount of Bitcoin sent, the sender and receiver addresses, and a unique hash code for the transaction.

In short, Blockchain is an innovative technology that enables cryptocurrencies to exist. It provides a secure and decentralized method of recording and verifying transactions, which is essential for the operation of digital currencies. At the same time, Blockchain's transparency and accessibility make it a powerful tool for a variety of applications other than cryptocurrencies.

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