You might have heard of Bitcoin. A few years back it took the world by storm and became one of the world’s largest currencies. If you have heard about digital currency, you have likely heard a lot of buzz about blockchain as well. But if you are hearing this word for the first time, you might not know what is Blockchain? How does it work? You might have possibly started surfing the google pages in search of a “Blockchain for Beginners” guide.
Like much of the technology in the world, cryptocurrencies or digital currency such as Bitcoin relies on some form of database to track a large volume of transactions and to keep them secure. The solution is the use of blockchain technology by blockchains.
Here we will provide you with a step-by-step guide on Blockchain for Beginners. And help you understand blockchain technology with a simple explanation.
Before jumping towards the Blockchain for Beginners guide it is important to know what is blockchain? Blockchain, a recording system that is difficult to append, hack or cheat the system
Blockchain technology relies on records of transactions that are shared across a network of computers. Once it is shared every computer in the network has access to it. To participate in this network it uses special software. The computers on the network verify the transactions in chunks of data called blocks.
Once the computer verifies the transaction record, it asks the network to add the block at the end of the chain of the other blocks. These blocks can stretch a long way back to the earliest transaction in an unbroken chain.
This system of recording information continuously keeps growing and you cannot alter the chain going through some points in the past. If anyone tries to do so, then it will alter all the blocks since then. So it will be hard to alter or break any block in the past. That is why blockchain technology is immutable or unchangeable because everyone using the system would be watching.
Blockchain stores information across the network of personal computers making them distributed rather than just decentralized. This means there is no central authority that owns or controls the system, yet everyone can use it.
Digital currencies like Bitcoins, Ethereum, Steem, etc., use their blockchain technology by tracking records of ownership over digital cash. This helps them to ensure only one person can be the owner at a time and the same cash cannot be sent twice.
Blockchain 2021 tends to make online transactions more secure while eliminating the middlemen from it. Since blockchain is not centralized, no one entity or any organization can control it. Whenever a new block is added to the chain, the computer connected to the network verifies whether the previous transactions occurred. Because each block references the block before it, and each transaction made down to the original block is confirmed. The block that attempts to cheat the system looks different from other blocks. Since blockchain requires consent among all users, the cheater’s version of blockchain will be disposed of.
Blockchain technology is currently used for various industries. industries like supply chain, healthcare, retail, media and advertising, oil and gas, and more. Some of the promising uses of blockchain technology are:
Cryptocurrencies let you transfer digital money faster and cheaper across borders without a bank. Polkadot (DOT), NEO. Cardano (ADA), Tether (USDT) are a few digital currencies other than Bitcoin and Ethereum.
There are many banks like Barclays, Canadian Imperial Bank, and more that are interested in how blockchain technology can make their settlement system more efficient.
People can buy and sell energy directly without an intermediary.
This technology can be used to track precious metals’ origin and food traceability. This makes identifying the contaminated food easy.
Blockchain technology can speed up the time required to pay health insurance payments to patients. It can even store and securely share medical data and records.
With blockchain attracting many big companies like Amazon and Tesla, blockchain technology can be an attractive investment.
However, there are also risks. As it is a new technology and many projects will work out. Therefore, invest only in what you can take even if goes on loss. Before investing, do your research to determine whether the project is worth investing in or not, and then decide what level of exposure you would like to have.
Below we have mentioned few ways you can invest in the blockchain:
Blockchain is the present and the future. It has many promising features like faster cross-border payments and smart contracts. More and more companies are realizing how blockchain technology can help them. This technology can provide more security and efficiency to the company to commit more resources, money, and time to the technology.
Hopefully, this “Blockchain for Beginners” guide helped you to get acquainted with the topic and lit a small fire in you to learn even more about a technology that is paving its way towards the future.