Hey there, curious minds! Are you ready to learn something new today? If you want to be a crypto boss, you need to know your basics. So, Robi is here to teach you!
What is a Blockchain?
Blockchain is a decentralized ledger that records all transactions across a network. It also can be described as a continuous chain of blocks with information combined according to specific rules. Each new block contains data from the previous block.
The key reason blockchain is considered secure is how these new blocks are formed. Before a new block is added to the ledger, most nodes must validate the legitimacy of the new data.
For a better understanding, let’s look at the 3 main components of a blockchain:
- Blocks — store and manage permanent records of transactions. In each block, there is a record of transactions and sets of data.
- Miners — add new blocks to the chain by mining. Adding data to a block requires solving complex mathematical problems.
- Nodes — connect blocks to form a chain. Essentially, a node is what holds a copy of a ledger and keeps the network running.
Are you ready to dig in a little deeper?
Discover the fundamental concepts of a Blockchain!
To comprehend how a blockchain operates, it’s important to discuss the main components and benefits:
- Smart contracts
- Decentralized data
- Transactional records
- Transaction speed
- Transaction fee
Without further ado, let’s get learning!
📕 Smart Contracts
A smart contract is a computer code that executes agreements between two or more parties when certain conditions are met. It is used on a blockchain to establish, validate and negotiate a contract agreement. So in simple terms, smart contracts ensure that all required conditions are fulfilled before completing any actions.
🌐 Decentralized data
The data recorded on a blockchain is not controlled by any particular individual or central authority but is protected by an extensive peer-to-peer network of computers running open-source software. The decentralization offers great advantages:
- No third party involved — hence no additional risk;
- Users have control over their digital assets;
- Transparent profile- it’s possible to trace every change;
- Doesn’t depend on human calculations — failures are less likely to occur.
📄 Transactional Records
Blockchain technology makes transaction verification and recording happen instantly and permanently. When a transaction is entered into the blockchain, all nodes immediately record, verify, and settle the transaction’s data, including the price, asset, and owner.
⏰ Transaction Speed
Transaction speed is one of the key criteria to determine whether blockchain is viable. Transaction speed measures how quickly data is transferred between accounts. Several elements determine the speed of a transaction:
- Block time;
- Block size;
- Transaction fees;
- Network traffic.
Based on a blockchain and network load, transactions can take a few minutes to several days to be completed.
You’re doing great! Just a little longer! Let’s keep going!
💸 Transaction fee
Transaction fees are greatly influenced by a number of factors, including the kind of transaction, the payment mechanism, and the blockchain on which it occurs. In general, blockchain transaction fees are relatively low; however, based on the traffic of a particular network, the fees can increase significantly.
Do you want to experience low fees starting from 0.1%? Biswap DEX provides you with such an opportunity!
Theoretically, fraudulent transactions are nearly impossible on decentralized networks like blockchains. Every node and ledger would have to be hacked and changed to enter forged transactions. Due to proof-of-work or proof-of-stake transaction verification methods, adding fraudulent transactions is complex with many cryptocurrency blockchain systems.
However, you need to know how scammers can get your information. Read about scams and safety measures in the following articles:
It is common for blockchains to use open-source software. It means that its code can be viewed in real-time by anyone. Via the blockchain explorers, users can search and display information about transactions and public addresses: blockchain blocks, their contents, and other relevant details.
A key characteristic of blockchain technology is its immutability. It means you can’t manipulate any data already on the blockchain. So, for example, a government or corporation is not able to replace, modify or falsify data stored on the network.
And that’s all for today! Do you feel like conquering the crypto world? If you need to boost your knowledge, explore Biswap Education Hub! You will find many useful articles there 😉
Educate yourself to navigate the DeFi space confidently!
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