To understand how cryptocurrencies work, we need to explain three core concepts.
They are:
🔴 the blockchain,
🔴 cryptocurrency mining, and
🔴 cryptocurrency wallets.
✅ Blockchain Technology
A blockchain is similar to a database but better. Databases store large volumes of data electronically on computers or on servers made up of powerful machines, often centralized for easy storage and retrieval. The blockchain differs in its setup. Unlike a database, the blockchain is a decentralized public ledger. The computers powering this network are not all under one roof or controlled by a single entity.
Additionally, a blockchain collects data in groups, known as "blocks." These blocks have fixed storage capacities, and once filled, they are chained to previous blocks, forming a chain of data, or the "blockchain."
In the case of Bitcoin, the blockchain stores every transaction initiated on the network. Stay tuned for the next parts where we dive deeper into cryptocurrency mining and wallets!
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