1. Blockchain Technology
Blockchain is a decentralized, distributed ledger that records transactions across many computers in such a way that the registered transactions cannot be altered retroactively.It consists of a series of blocks, each containing a list of transactions. Each block is linked to the previous one, forming a chain—hence the name "blockchain."This structure ensures that once data is recorded, it is nearly impossible to change it without altering all subsequent blocks, which would require the consensus of the network.
2. Cryptocurrency
Cryptocurrency is a digital or virtual form of currency that uses cryptography for security.Cryptocurrencies operate on blockchain technology, which allows for peer-to-peer transactions without the need for intermediaries like banks.Popular cryptocurrencies include Bitcoin, Ethereum, and many others.
3. How They Work Together
In a crypto blockchain, transactions are recorded in blocks. Once a block is filled with transactions, it is added to the blockchain.Each transaction is verified by a network of computers (nodes) through a process known as mining or validation.Mining: For cryptocurrencies like Bitcoin, miners solve complex mathematical problems to add new blocks to the blockchain and are rewarded with cryptocurrency.Consensus Mechanisms: To ensure that all copies of the blockchain are the same, blockchain networks use consensus mechanisms like Proof of Work (PoW) or Proof of Stake (PoS).Once a block is added to the blockchain, the transaction is considered confirmed and cannot be reversed or tampered with.
4. Security
The blockchain's decentralized nature makes it highly secure. Since it is distributed across many nodes, it is resistant to hacking and fraud.The use of cryptographic techniques ensures the integrity and confidentiality of transactions.
5. Applications Beyond Cryptocurrency
While blockchain was first developed for Bitcoin, its applications go beyond cryptocurrencies. It can be used in various fields like supply chain management, voting systems, and smart contracts.
