Blockchain has been called the most revolutionary technology since the internet. It can drastically change our daily life, for example because it clearly plays a role in the Bitcoin price. It has the potential to completely turn the status quo upside down and replace all middlemen and agencies. The only disadvantage? Nobody really understands it at the moment. Fortunately, after reading this article, you can explain to everyone in an easy understandable language exactly what the blockchain is in order to get your family and friends excited as well. So what is the blockchain?
How do we currently pay for products and services?
To understand what blockchain is and what the benefits are, it is important to know how money and money transactions in particular work nowadays. In the past, we used physical cash to pay for products and services, but in recent years most transactions are done digitally. The digital form of money is therefore on the rise, but this form works in a completely different way than cash. After all, with digital transactions a bank will keep track of the money that has been transferred. This bank will keep a record of this in their ledger, which is also used in the crypto world. A ledger is the record of debit and credit entries from all journals in order of category and within that category in order of time.
What is blockchain technology?
Blockchain technology provides a way for people or agencies that do not trust each other to agree on a common digital history. A common digital history is important, as digital currencies and transactions are, in theory, easy to copy. Blockchain technology solves this problem without the need for a trusted intermediary or agency. In other words, it is the solution for those expensive banks, as they can be removed if the blockchain technology is used for a transaction with the Ripple price. After all, the blockchain ensures that the transaction of 5 euros is automatically added to a global ledger in which all transactions are recorded. It is then also checked whether this transaction is valid. Therefore, an intermediary is no longer needed, as the blockchain keeps track of the transactions. The miners, which are the computers that keep blockchain running, also do this.
How does a blockchain transaction work?
When sending money via the blockchain to someone else, this transfer will be called a block. This contains the information about the transaction, including the value, the sender, the receiver, et cetera. The miners will then check this block. Miners are users who ensure that the blockchain remains safe and workable, although these are in fact computers. They have the entire blockchain on the hard drive and can therefore check if the sender indeed has the money in their wallet. The miners who check this are randomly set and receive a small fee for the work they do to cover energy costs and perhaps a little extra. If the miners decide that it is a valid transaction, the block is approved. It will then also be added to the blockchain, so the receiver receives the money. This block will then be checked again in the next transaction, so the receiver can spend the money, for example to purchase ADA, which you can check through the Cardano price.
Once you understand how the blockchain works and the technology used for this system, you will already understand more about it than 99 percent of everyone else. This is useful, as you might have an advantage when it comes to trading crypto.
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