Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Blockchain in cryptocurrency became a very important topic in recent years as virtual currencies and different blockchain networks expanded all over the world. However, not everyone knows what is blockchain in cryptocurrency or which is the impact that distributed ledgers have on digital assets.
To have a clear idea of how a distributed ledger could impact our lives in different ways, we need to first understand what blockchain is all about and how it works. Decentralization has been one of the most discussed advantages of blockchain technology, but this is not the only positive aspect of these networks.
[Blockchain technology requires developers that would modify the characteristics of specific networks]
What is Blockchain?
Blockchain technology is a type of network or system that makes it possible for users (single individuals, companies or governments) to register, track and store information in a safe and secure way. This is the fastest and shortest way to answer the question “what is Blockchain?”
This sounds very similar to a normal database, but there are some key differences.
Rather than storing information using a typical database, with blockchain technology data is stored in blocks. These blocks are connected to each other, forming, in this way, a blockchain. The data stored in these blocks becomes then immutable. This is why distributed ledger technology became so important and valuable.
Thus, blockchain technology could be described as a sequence of blocks with information from different parties, that makes it possible to immutably secure valuable data.
Nowadays, there are different types of blockchain applications and solutions. Blockchain technology can be used as a closed ecosystem in a corporation, it can be used to store data from governments, and it can also be used by cryptocurrencies.
Let’s also focus on the fact that one of the possibilities related to blockchain technology is related to its decentralization power. While databases are controlled by a centralized party and the information can be easily changed and modified, blockchain technology makes it possible for an organization or digital assets to reach consensus using a decentralized network of parties.
Decentralization is the keyword when we search for the answer to “what is blockchain?”
[What is Blockchain Technology?: a secure and decentralized database that can be used by companies, individuals and governments].
What is Blockchain in Cryptocurrency?
Now that we have answered the question “what is blockchain?” we can focus on what is blockchain in cryptocurrency. This is where things get interesting. As we have seen in the previous section, blockchain technology can be used in many different industries. Both the private and public sector can benefit from blockchain technology and its implementation.
Nonetheless, we want to know what is blockchain in cryptocurrency and how digital assets rely on this innovative technology to operate.
The most popular cryptocurrency in the world is Bitcoin (BTC). It relies on its own blockchain network that registers all the transactions that users process through it. Thanks to blocks that are processed every around ten minutes, interested parties are able to process transactions from anywhere around the world.
Another blockchain network, Ethereum, makes it possible for companies and developers to deploy smart contracts. Smart contracts are instructions that execute automatically as soon as specific conditions are met. This reduces human intervention in different blockchain protocols and automates a large number of processes.
Blockchain in cryptocurrency would define the way in which digital assets work. The output of a specific network depends on the characteristics of the underlying blockchain. For example, Litecoin (LTC) transactions are faster than Bitcoin transactions because of the block interval (10 minutes on the Bitcoin blockchain and 2.5 minutes on the Litecoin network).
However, with this same example, we can also say that the Bitcoin network is more secure than the Litecoin network due to the incentives there are behind this blockchain network.
To summarize, blockchain in cryptocurrency would define the characteristics of each of the networks and provide different incentives and solutions to users.
Author Bio:
Carlos is an international relations' analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites, with over 2,000 articles published.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.