You have probably heard about blockchain at this point. It has become a household term, and most people have some connection to the word. But why is it like this? Why has blockchain taken the world by storm, and why should everyone know what blockchain is?
What is blockchain?
First and foremost, let’s talk about what blockchain actually is. A blockchain is a disruptive database or ledger where information is stored. It is shared among the nodes of a computer network, making the content of the blocks transparent and safe. Blockchain is a database that stores information in electronic and digital formats, for everyone to see. It can be described as a public bookkeeping system that, among other things, stores transaction details from cryptocurrencies.
It is necessary to maintain security in the decentralized records of transactions of cryptocurrencies such as Bitcoin and Ethereum, the world’s two biggest cryptocurrencies at the moment. Blockchain education will also teach you something about proof of work (PoW) or proof of stake (PoS). These are consensus mechanisms put in place to prevent bad actors from validating transactions or double-spending. They allow for agreements and there is no single nod in charge. These mechanisms make it possible for blockchain to act as a record of data that generates trust without the use of a third party.
The rise of DeFi
The innovative nature of blockchain is what makes it so relevant today. The times of traditional banking might be over, soon, or at least changing. DeFi, Decentralized Finance, is emerging and blowing us all away. By introducing DeFi, consumers are able to store their money safely in digital wallets, without the need for a third party such as a bank. You are also able to create smart contracts, a program that allows two parties to form an agreement and complete a task digitally with no risk of fraud. Transactions are done decentralized on the blockchain also allows for safer, faster, and fee-less transactions.
While blockchain has become much more than a part of cryptocurrencies, there is no doubt that it is where it got its well-deserved fame from. When Satoshi Nakamoto first introduced Bitcoin, the original cryptocurrency to the world, we were all blown away by the impressive and innovative way of using technology and decentralized solutions on the blockchain network.
It has changed the way many view payments nowadays, and cryptocurrencies are becoming more and more popular. While there are definitely highs and lows in the market, some cryptocurrencies are very established, and will likely live on for a long time, perhaps changing the way we all pay in the future.
Needless to say, blockchain is emerging as a highly relevant technology for most. We will likely be seeing more of it in the future, with the many smart features it makes room for, and the use of cryptocurrencies. Therefore, it is important that everyone knows a thing or two about blockchain, to be held in the loop when the blockchain revolution is in full swing.
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