The blockchain architecture comprises various layers, such as infrastructure or hardware, data, networking like nodes, verification, information distribution, and applications. Let’s understand some of its components. Block As explained above, blockchain refers to a chain of different blocks that contain data or records. And the data in each block is based on the kind of  blockchain . For example, a banking blockchain will have blocks containing information such as account number, account holder’s name, branch name, etc. The first block in a blockchain is known as the Genesis block, and all the blocks contain valid records encoded and hashed. Each block has a cryptographic hash of its own and that of the previous block in the same blockchain, linking them and forming a chain. This iterative process validates the previous blocks’ integrity with digital signatures. Hashing A hash is like a fingerprint unique to every block. It is a code created using a mathematical function turning d...

Blockchain is an immutable (unchangeable) and shared digital ledger that stores records or transactions in several places on a network of computers. Here, each verified transaction is added in a space called a block that links with other subsequent blocks with the help of cryptography, forming a chain. If that definition made you scratch your head, let’s understand blockchain technology in simpler terms. Blockchain is a kind of database that stores data (records) on a computer electronically. Block = A space that contains records Chain = A link connecting records So, a chain of linked blocks containing records is called a blockchain. All blockchains are databases, but not all databases are blockchains. The difference between a database and blockchain is how they store data. Blockchain vs. Database A database collects a vast amount of information and arranges it in a tabular format to allow users to modify data easily and simultaneously. Also, more extensive databases use servers with p...

  Cryptocurrencies are usually built using blockchain technology. Blockchain describes the way transactions are recorded into "blocks" and time-stamped. It's a fairly complex, technical process, but the result is a digital ledger of cryptocurrency transactions that's hard for hackers to tamper with. In addition, transactions require a two-factor authentication process. For instance, you might be asked to enter a username and password to start a transaction. Then, you might have to enter an authentication code sent via text to your personal cell phone. While securities are in place, that does not mean cryptocurrencies are un-hackable. Several high-dollar hacks have cost cryptocurrency start-ups heavily. Hackers hit Coincheck to the tune of $534 million and BitGrail for $195 million, making them  two of the biggest cryptocurrency hacks of 2018 . Unlike government-backed money, the value of virtual currencies is driven entirely by supply and demand. This can create wild ...

  Unfortunately, cryptocurrency crime is on the rise. Cryptocurrency scams include: Fake websites:  Bogus sites which feature fake testimonials and crypto jargon promising massive, guaranteed returns, provided you keep investing. Virtual Ponzi schemes:  Cryptocurrency criminals promote non-existent opportunities to invest in digital currencies and create the illusion of huge returns by paying off old investors with new investors’ money. One scam operation, BitClub Network, raised more than $700 million before its perpetrators  were indicted in December 2019 . "Celebrity" endorsements:  Scammers pose online as billionaires or well-known names who promise to multiply your investment in a virtual currency but instead steal what you send. They may also use messaging apps or chat rooms to start rumours that a famous businessperson is backing a specific cryptocurrency. Once they have encouraged investors to buy and driven up the price, the scammers...

  When it was first launched, Bitcoin was intended to be a medium for daily transactions, making it possible to buy everything from a cup of coffee to a computer or even big-ticket items like real estate. That hasn’t quite materialized and, while the number of institutions accepting cryptocurrencies is growing, large transactions involving it are rare. Even so, it is possible to buy a wide variety of products from e-commerce websites using crypto. Here are some examples: Technology and e-commerce sites: Several companies that sell tech products accept crypto on their websites, such as newegg.com, AT&T, and Microsoft. Overstock, an e-commerce platform, was among the first sites to accept Bitcoin. Shopify, Rakuten, and Home Depot also accept it. Luxury goods: Some luxury retailers accept crypto as a form of payment. For example, online luxury retailer Bitdials offers Rolex, Patek Philippe, and other high-end watches in return for Bitcoin. Cars: Some car dealers – from m...

  Once you have purchased cryptocurrency, you need to store it safely to protect it from hacks or theft. Usually, cryptocurrency is stored in crypto wallets, which are physical devices or online software used to store the private keys to your cryptocurrencies securely. Some exchanges provide wallet services, making it easy for you to store directly through the platform. However, not all exchanges or brokers automatically provide wallet services for you. There are different wallet providers to choose from. The terms “hot wallet” and “cold wallet” are used: Hot wallet storage:  "hot wallets" refer to crypto storage that uses online software to protect the private keys to your assets. Cold wallet storage:  Unlike hot wallets, cold wallets (also known as hardware wallets) rely on offline electronic devices to securely store your private keys. Typically, cold wallets tend to charge fees, while hot wallets don't.

  You may be wondering how to buy cryptocurrency safely. There are typically three steps involved. These are: Step 1: Choosing a platform The first step is deciding which platform to use. Generally, you can choose between a traditional broker or dedicated cryptocurrency exchange: Traditional brokers.  These are online brokers who offer ways to buy and sell cryptocurrency, as well as other financial assets like stocks, bonds, and ETFs. These platforms tend to offer lower trading costs but fewer crypto features. Cryptocurrency exchanges.  There are many cryptocurrency exchanges to choose from, each offering different cryptocurrencies, wallet storage, interest-bearing account options, and more. Many exchanges charge asset-based fees. When comparing different platforms, consider which cryptocurrencies are on offer, what fees they charge, their security features, storage and withdrawal options, and any educational resources. Step 2: Funding your account Once you...

There are thousands of cryptocurrencies. Some of the best known include: Bitcoin: Founded in 2009, Bitcoin was the first cryptocurrency and is still the most commonly traded. The currency was developed by Satoshi Nakamoto – widely believed to be a pseudonym for an individual or group of people whose precise identity remains unknown. Ethereum: Developed in 2015, Ethereum is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum. It is the most popular cryptocurrency after Bitcoin. Litecoin: This currency is most similar to bitcoin but has moved more quickly to develop new innovations, including faster payments and processes to allow more transactions. Ripple: Ripple is a distributed ledger system that was founded in 2012. Ripple can be used to track different kinds of transactions, not just cryptocurrency. The company behind it has worked with various banks and financial institutions. Non-Bitcoin cryptocurrencies are collectively known as “altcoins” to disting...

Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders. Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets. If you own cryptocurrency, you don’t own anything tangible. What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party. Although Bitcoin has been around since 2009, cryptocurrencies and applications of blockchain technology are still emerging in financial terms, and more uses are expected in the future. Transactions including bonds, stocks, and other financial assets could eventually be traded using the technology.

  Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions.   It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments . Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets. Cryptocurrency received its name because it uses  encryption  to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety. The first cryptocurrency was  Bitcoin , which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times d...