Blockchain is a technology that works as a âdigital ledgerâ where all transactions are recorded securely and transparently. Imagine a spreadsheet where every time someone makes a change, a copy is saved that cannot be altered, and is viewable by all users. Each group of transactions forms a âblock,â and all blocks are connected (hence the name âblockchainâ).
Another way to think about it: Think of a whiteboard in a classroom. Whenever a student writes something on the board (a transaction), the other students (users) can see what has been written, and they cannot erase or change what is there. Everyone has access to that whiteboard and can always check what has been written in the past.
How was Blockchain born?
Blockchain was created in 2008 by a person (or group) under the pseudonym Satoshi Nakamoto to serve as the basis for the first cryptocurrency, Bitcoin. Satoshi wanted to create a digital money system that did not rely on intermediaries (such as banks) and was completely decentralized, meaning that everyone could verify and validate transactions.
Advantages of Blockchain
1. Security: Every transaction is immutable and recorded forever. It is extremely difficult to hack.
- Example: If you pay with Bitcoin in a store, everyone can see that the transaction happened, but no one can change the details afterwards.
2. Transparency: Anyone can verify the transactions that have been made, which prevents fraud.
- Example: If a company claims to have received a payment, you can verify it on the blockchain.
3. Decentralization: There is no central authority (such as a bank) controlling the network, giving more power to users.
- Example: You don't need to ask a bank for permission to send money to another person.
Disadvantages of Blockchain
1. Scalability: Sometimes the network can become slow when many people are using it.
- Example: If there are many transactions at the same time, such as during Black Friday, it may take longer for transactions to be processed.
2. Energy usage: Some systems, such as Bitcoin, require a lot of energy to operate due to the mining process.
- Example: The energy cost of verifying transactions on the Bitcoin network is similar to that of running a small city.
3. Irreversibility: Once a transaction is recorded on the blockchain, it cannot be changed or cancelled.
- Example: If you send money to the wrong address, there is no way to get that money back.
How has Blockchain entered our daily lives?
- Digital payments: You can send money anywhere in the world without needing a bank.
- Example: If you have a relative in another country, you can send them Bitcoin directly.
- Data security: Businesses can use blockchain to securely protect their records.
- Example: Hospitals can store medical records on blockchain to ensure they are not altered or lost.
- Smart contracts: These are agreements that are executed automatically when certain conditions are met.
- Example: If you rent a car using a smart contract, once you pay, the system automatically gives you access without the need for intermediaries.
How to use Blockchain on Binance?
- Cryptocurrency trading: You can buy, sell and store cryptocurrencies on Binance using blockchain technology.
- Example: If you buy Bitcoin on Binance, the transaction is recorded on the blockchain and you can verify it.
- Staking: You can participate in "staking", which is locking up your cryptocurrencies to earn rewards.
- Example: On Binance you can stake cryptocurrencies like Solana, and receive more cryptocurrencies in exchange for supporting the network.
- Binance Smart Chain (BSC): Binance has its own blockchain, called Binance Smart Chain, which allows for the creation of smart contracts and other decentralized projects.
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