How Does Blockchain Technology Actually Work in Practice?
The world is spending nearly $12 billion on blockchain solutions for the problems that have bedeviled individuals and businesses for decades. By embracing the numerous strengths of this incredible, groundbreaking blockchain technology, people all across the world are able to take their lives and companies to new heights.
But, um, how does blockchain technology actually work?
People talk so much about blockchain that you can sometimes feel silly for not intuitively understanding how it all comes together. But fear not, in reality, the blockchain network isn’t so hard to grasp. Keep on reading and we’ll tell you all about the ins and outs of distributed ledger technology and the cryptocurrency market.
Blockchain Technology Is Ledger Technology
Imagine a ledger in an old-timey store. A big old book in which the store owner records their various incomes and outgoings. It’s a vital part of the business’ operations. Without it, the store wouldn’t be able to track stock, keep up with their debts, or record profits and losses.
But it has one big problem, pretty much anyone can come along and write anything they like in it. An unscrupulous store owner could keep fake accounts and use them to get up to all sorts of nefarious stuff. This kind of ledger — whether it’s a single big book or a single big spreadsheet on a computer — is only as trustworthy as the person who keeps it.
That’s blockchain’s great innovation. Instead of one big, single ledger, the blockchain is distributed across a vast and decentralized network. There’s no single record to alter, and the entries are protected by whizz-bang cryptography that makes sure no one is adding anything suspicious to the listings.
Pretty cool, right?
How Do Different Types Of Blockchain Get Used?
The most famous use of blockchain technology is, of course, Bitcoin. Who owns Bitcoin, where and when it’s sent, and all the other details about Bitcoin’s usage and distribution are accounted for in the Bitcoin blockchain. That’s how it stays secure.
But currency is pretty old-hat when it comes to the uses of blockchain technology, these days.
The most interesting new development in blockchain technology is in the form of NFTs (as in this link). These are tokens of ownership of digital artworks (or digital anything, really) that are stored indelibly on a blockchain. The one that’s usually used for NFTs is known as the Ethereum blockchain.
Those are the two most famous uses of blockchain technology today, but who knows where this fascinating tech could take us in future?
Have Block, Will Chain
So there you have it, folks, our quick guide to the inner workings of blockchain technology. Whether you’re looking to make a mint off Dogecoin or just want to know what all the guys on Twitter are talking about, we hope you found the answers you’re looking for.
Enjoyed this piece? Take a look at the rest of our site for more like it!