Blockchain Basics 

What Is Blockchain?

Blockchain is an exciting new technological innovation that holds great potential to revolutionise the way businesses and individuals operate today and into the future. In its most basic form, the blockchain automates transaction and record-keeping processes to create a public ledger that is instantly available for everyone to see. This is all done in a decentralised manner, meaning many of the traditional issues and constraints associated with centralised systems have been eliminated. 

Bitcoin and other cryptocurrencies have been the earliest adopters of the blockchain; however, they only scratch the surface of the potential for this technology. Its most prominent functionalities include: 

• Timestamping and notarisation: this function allows the storage of any kind of valuable information within the blockchain, creating a permanent record. 

• Smart contracts: software that runs exactly as programmed but with no possibility for downtime, censorship, fraud or third-party interference, and can implement logic to cryptocurrency transactions. 

• Defi: DeFi is short for “decentralised finance,” an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries.

• Tokenisation of Assets: The tokenisation of assets refers to the process of issuing a blockchain token (specifically, a security token) that digitally represents a real tradable asset.

• NFT’s:  Non-fungible tokens or NFTs are cryptographic assets on blockchain with unique identification codes and metadata that distinguish them from each other. 

How Cryptocurrency Transactions Work

Cryptocurrency transactions are recorded on a decentralized ledger known as a blockchain. This digital ledger is replicated across numerous computers, ensuring transparency and security.

When you initiate a cryptocurrency transaction, it’s broadcasted to the network. Nodes on the network validate the transaction, ensuring it’s legitimate and follows the network’s rules.

How Cryptocurrency Transactions Are Confirmed:

Proof of Work (PoW)

In some cryptocurrencies, miners compete to solve complex mathematical puzzles. The first miner to solve the puzzle adds the transaction to the blockchain and is rewarded with new cryptocurrency.

Proof of Stake (PoS)

In other cryptocurrencies, validators are selected to process transactions based on the amount of cryptocurrency they hold. They stake their cryptocurrency as a guarantee of honest behavior.

Once validated, transactions are grouped into blocks and added to the blockchain. This creates a permanent and immutable record of the transaction.

Key Features of Cryptocurrency Transactions:

Decentralisation 

No single entity controls the network.

Transparency

All transactions are recorded on the blockchain, making them visible to everyone.

Security

Cryptographic techniques ensure the security of transactions and prevent tampering.

Immutability

Once a transaction is added to the blockchain, it cannot be altered.