What is Blockchain technology? What is it used for? Is it safe? If you are asking any of these questions then this post is for you.
Blockchain technology is at its core a database. The data on a blockchain is stored across many nodes on a network of users’ computers in a decentralized fashion.
Blockchain differs from traditional databases by the way that it stores information. It gathers information together into blocks that have set storage requirements. When the block is filled, it is closed, timestamped, and then linked to the end of the chain of previously completed blocks by the use of hashes. This process is repeated for any subsequent transactions on the chain.
A notable feature of blockchain technology is that it is immutable. When a block is closed it is timestamped and cannot be edited or removed from the chain. The result is an accurate and reliable record of events that are publicly viewable.
What is blockchain used for?
Blockchain technology has many potential uses but is predominantly used in the world of cryptocurrencies. Its use in crypto is to ensure that transactions are executed in a safe and decentralized manner.
Blockchain has many other real-world uses outside of cryptocurrency. The Motley Fool has listed 20 of these in this blog post. I’ll pull out a few of the most exciting uses:
- Monitoring supply chains
- Digital voting
- Land ownership records
- Medical record-keeping
Metaverse
The Metaverse is another exciting space in which blockchain technology will play a crucial role. The two go hand in hand and as the Metaverse grows, so will its reliance on blockchain technology. The Metaverse is outside the scope of this blog post so I’ll save the details for a later. Watch this space if you are interested in learning more about the Metaverse!
Is blockchain technology safe and secure?
Blockchain technology is inherently safe. When a transaction is recorded on a blockchain, it cannot be altered, moved, or deleted without a majority of the network’s users agreeing to do so. The decentralised nature of a blockchain means that a single user cannot alter its group ledger.
If a user altered their own copy of a blockchain ledger, then as soon as this copy was compared to that of the other users it would be discarded as a discrepancy.
I have previously written a post regarding the safety of crypto. If crypto and blockchain safety is of interest to you then you can read about it here: Is Crypto Safe? Cryptocurrency for beginners.
What are Smart Contracts?
A smart contract is a function that is run on a blockchain when certain conditions are met. In the world of crypto, this means that when the conditions of exchange are met, the block is closed and the relevant parties are debited and credited. This is a contributing factor to the speed of blockchain technology.
Binance Smart Chain?
You may have heard of Binance Smart Chain and wondered what it is. Well, Binance Smart Chain is simply one iteration of a blockchain. It is run by the Binance company and was introduced as a supplement to their existing Binance Chain so that they could easily implement newer technologies.
What is a Blockchain Wallet?
A blockchain wallet can refer to two things: a general cryptocurrency wallet or a cryptocurrency wallet from the Blockchain company.
A cryptocurrency wallet is somewhere a user can manage and store Bitcoin, Polka Dot and other cryptocurrencies.
The Blockchain software company is one of many companies that provide these wallets to its customers.
That’s all for now, thanks for reading
Iain McClafferty – The Five Year Mortgage
