[START HERE] What is Crypto?
Digital networks using Blockchain Technology to record transactions.
Think of Blockchain Technology as a database that is distributed using many nodes spread around the world to form a computer network. Within the Blockchain, transaction information is stored and transferred electronically, using Cryptography.
Where does the name Cryptocurrency come from?
Cryptography is the method to secure information and communication through the use of codes. We can conclude the name Cryptocurrency originates from the combination of ‘Cryptography’ and ‘Currency’.
What is Blockchain Technology?
As the name states, Blockchain collects and groups information into blocks. Blocks have storage capacity limits, and when filled, are then closed and linked to the previously filled block, which forms a chain of data. Any new information is compiled into a new block and added onto the Blockchain, creating a timeline of data.
When Blockchain Technology is used in a decentralized way, no person or group has the ability to amend information, creating a secure and trustworthy ledger of transactions. The Blockchain becomes immutable and the data is irreversible. The data is permanently recorded, publicly viewable to anyone, and verifiable. Essentially, decentralization is the unique proposition upon which Blockchain and Crypto differentiates itself from other technologies. Blockchain maintains trust without the need of a third party, such as governments, organizations or companies.
How are transactions processed?
As new transaction information is created, it is transmitted amongst the different nodes within the network of computers. They are responsible for solving complex equations and algorithms, to confirm the validity of the transaction. Once confirmed to be a legitimate transaction, it forms the new block and then is chained to the history of transactions.
Computers can earn cryptocurrencies as a reward for processing and verifying transactions, and in turn incentivizing more computers to join the network. As there is no single point of failure, the network is more secure.
Why is Blockchain Technology more secure?
Since the database is spread out across different computer networks all around the world, it is less likely for there to be interference from human or environmental factors that can interrupt or disable the Blockchain network.
With the computer nodes all working together, if someone tries to alter the Blockchain or input incorrect data, the other nodes would cross reference the information, and detect the error.
In order to validate new entries to a block, a majority of the network's nodes would need to agree to it.
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