Cryptocurrency has major security issues.
Unlike fiat currency—the kind of money most people use every day—cryptocurrency isn’t regulated by a government, and it’s not insured by a banking system, so investors don’t have the same protections against things like theft and Ponzi schemes.
Blockchain technology helps solve this problem. While blockchain doesn’t keep cryptocurrency investors completely secure from losses and scams (opens in new tab), it does track and verify information about crypto transactions, including who has rightful ownership of a token.
What exactly is blockchain?
Blockchain is a virtual ledger that stores information about cryptocurrency (opens in new tab) transactions.
To break it down further, the “block” in blockchain refers to a unit of information that’s been added to the ledger. A single block can contain all kinds of information, but it typically includes the following details about cryptocurrency or NFT transactions:
- The sender and receiver
- The date and time of the transaction
- The amount and type of asset
Each block in the blockchain also has a unique identifier, called a “hash,” which is a long series of characters that acts like a digital pin or a fingerprint.
When a new block is created, it contains the previous block’s hash, therefore forming an end-to-end “chain” of traceable transactions.
Is blockchain the same as bitcoin?
Blockchain was invented to be used with Bitcoin, but they aren’t the same thing.
Bitcoin (opens in new tab) is a…
