The blockchain has made headlines in recent years as one of the most impactful technologies to come around in recent history. However, despite being so popular, many people are still not aware of what it is and how it works. If you’re one of these people, this article will explain the basics of the blockchain and how it works in layman’s terms.
Topics that we covered
- What is blockchain?
- How does it blockchain work?
- What are the advantages of blockchain?
- Can you give an example of a real world use case for blockchain?
- Should I be worried about cryptocurrency market fluctuations?
- How do I get started with bitcoin and other cryptocurrencies?
What is blockchain?
Blockchain technology is a way of sending information over a network, such as computers or, say, Bitcoin transactions. By distributing information throughout a large network of peers who are constantly communicating and checking with each other on what’s happening (e.g., which Bitcoin transactions have taken place), blockchain eliminates single points of failure, meaning it can’t be shut down by one person or entity because everyone is always keeping track of it.
How does blockchain work?
You can find similarities between the way email works and how blockchain works because they’re made to solve similar problems. But whereas an email goes from sender to receiver, with blockchain transactions happen all at once on a virtual list instead of one by one- which means that anyone can see what’s happening on the list, but they can’t tell who belongs or who initiated. That was only a test transaction- generating addresses and copying-pasting before this became easy is just too complicated now!
What are the advantages of blockchain?
Blockchain technology is going to change the way we live; we can tell by looking at how well it has done so far. This innovative new technology – with only 10 years under its belt – will cause a paradigm shift in our society, improving everything from finance and medical care to logistics and food safety. There are many different use cases for this disruptive technology (which some say may just be blockchain’s first wave), but one thing is clear: blockchain will soon become the standard solution.
Can you give an example of a real world use case for blockchain?
Is this the first time you’ve heard of blockchain? People often jump straight into Bitcoin without realizing what else Blockchain can do. Digital currencies are just one potential use out of many other applications, such as securing copyright and intellectual property rights, storing data (legal or otherwise), tracking supply chains, recording medical records (consider your personal health record a form of digital currency!), and so on. In fact, there are entire businesses solely dedicated to providing these products–and each one has its own take on how Blockchain should be used!
Should I be worried about cryptocurrency market fluctuations?
You’ve probably heard about bitcoin and cryptocurrency before, but maybe didn’t know how it all worked or had too many questions. It can seem complicated at first – especially because there are no regulations to govern the markets- but after this crash course you’ll be trading like a pro! Cryptocurrency markets fluctuate greatly just like any other traditional market would; however, because they’re relatively new and without regulation, you never really know for sure what’s going to happen next. Sure, we all want those record high prices back- but does that mean we should avoid investing? Maybe not- who knows? What we do know for sure is that crypto doesn’t always go up – sometimes it goes down too! But isn’t that part of the adventure?
How do I get started with bitcoin and other cryptocurrencies?
You might want to consider registering at Coinbase. It’s a website where you can buy, sell, and trade cryptocurrencies like bitcoin. I would also recommend that you set up a cryptocurrency wallet- some people prefer using something called a hardware wallet like Trezor or Ledger. For my money, though, I prefer software wallets that live on your computer (like Jaxx or Exodus). That way, all of your digital currencies are backed up in one place and aren’t vulnerable to hackers. Just remember: it’s important to do your own research before investing in any cryptocurrency – this isn’t financial advice!
