Blockchain for Dummies: Understanding Cryptocurrency

The Blockchain was conceptualized by the mysterious Satoshi Nakamoto, who is credited with creating the technology. It is a complex piece of technology that is now being used for all sorts of digital data. For now, we’ll break it down into “Blockchain for Dummies” so that it can be understood by the layperson.

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Blockchain for Dummies

Blockchain technology is on of the most revolutionary advancements of this century, but how it works is still too complicated for many to understand. It’s hard to explain blockchain in a sentence, but John Giordani for Forbes does a great job simplifying the technology; he defines blockchain as “a public register in which transactions between two users belonging to the same network are stored in a secure, verifiable and permanent way.” This single definition gives a general concept, but how the technology works involves a lot more detail. Fortunately, our blockchain for dummies guide can help you better understand how it works.

Step 1: The Transaction Request

The use of the blockchain technology begins with a transaction request. Somebody on the trading platform has to initiate the transaction, and then it is broadcasted to a peer-to-peer (P2P) network. That network is actual made of computers, each one called a node.

Step 2: The Transaction is Validated

The nodes validate the transaction and the status of the user with its known algorithms. This verified transaction doesn’t have to be limited to cryptocurrency. It can involve secure documents, such as contracts, financial information, or medical records.

Step 3: The Transaction Is Combined With Other Transactions

Once the verified transaction is underway, it is combined with other verified transactions in a new “block” of data, which is added to the digital ledger. This new block is then permanently added to the already existing blockchain such that it cannot be changed in anyway going forward.

Why Blockchain Matters

So we’ve broken down how blockchain transactions work, but why is this technology so great? Having even a basic knowledge from a blockchain for dummies guide is crucial in today’s world. The adoption of blockchain technology is growing and it has the potential to revolutionize businesses across the world. In businesses without blockchain, you have two different parties keeping a ledger. For example, if I buy an ice cream cone, I keep tabs on my personal spending, and the ice cream shop marks my purchase as a sale in their own ledger. Unfortunately, separate ledgers can end up different – which can be a major problem. Blockchain technology creates an irreversible ledger that both parties can access. Furthermore, there is no central location of the ledger that a hacker can access. It’s safe and provides all parties of a transaction with the same information.

Get Started with Blockchain Today

If you’re ready to start seeing the blockchain in action and want to own cryptocurrency, head over to your nearest Pelicoin ATM. Pelicoin ATMs are a convenient and fast way to buy cryptocurrency all over the Gulf South. You can learn more about cryptocurrency on our blog! Contact Pelicoin today with any questions at (504) 507-0879 or support@pelicoin.com.