When people talk about “the blockchain,” they can mean a couple of things. |
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When people talk about “the blockchain,” they can mean a couple of things. The blockchain is a collection of “transactions,” like asset or money transfers between persons, that are linked together cryptographically in such a way that forging or inserting fake transactions is practically impossible. The integrity of this sequence of transactions is guarded by thousands of networked computers working together to make sure that not one single computer can go rogue and dominate the blockchain sequence or decisions of the network.
This network of computers overseeing a particular chain of transactions is also sometimes referred to as “the blockchain,” even though, technically speaking, the blockchain is the chain of transactions, not the computers that secure and maintain it. That’s why one might talk about “which blockchain are you on,” referring to which particular network of computers one is talking about, as opposed to: “this blockchain sequence was forged,” referring to the interlinked chain of transactions. Which of the two is meant usually becomes clear through context.
There are many different networks, or “blockchains” out there, but only one true, valid “blockchain”, or sequence of transactions, in each network. You’ve probably heard of several of these blockchain networks: Bitcoin, Ethereum, or Litecoin, for instance. Each network must have only one valid blockchain transaction sequence otherwise any bad actor could insert their own transactions into the network. For every blockchain network, there is only one source of truth, the main blockchain transaction sequence, which goes back all the way to the very first moment the very first coin on the network was minted.
Interested in diving deeper on different types of cryptocurrencies? We have compiled the basics for you below. |
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| TOKENS AND CRYPTOCURRENCIES |
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Speaking of coins, you’ve probably also heard of the term “cryptos” or “cryptocurrencies,” including, no doubt, Bitcoin, Ether, Dogecoin, or Monero, for example. Cryptocurrencies are simply digital tokens, or counts of an item that represent some sort of value. This value can be used for many things: representing real life cash (for example, one Bitcoin represents approximately 27,000 USD these days), pieces of land, stock in a company, credits for a game or benefits or rewards for a shop or e-commerce store, one voting or decision credit, or almost anything you can think of. That’s why, sometimes some cryptocurrencies are simply referred to as “tokens,” especially when they are not being used to represent real life money. One cool thing most blockchain tokens do is to reward each computer on their respective blockchain network for the “work” or cost involved in maintaining the network. There are many ways to “reward” this work, which is a very interesting area of study, so I recommend you read up on this if you’re so inclined.
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So where do crypto wallets come in? Wallets are a means to store digital assets, including cryptocurrencies, tokens, and NFTs. We will delve more deeply into how wallets work and what NFTs are in the next email.
Enjoying this course so far? Connect a digital wallet in real life and claim benefits for doing so. |
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