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Cryptocurrency, NFTs, blockchain technology, it’s all mumbo jumbo to most people. But these terms keep making news headlines.
El Salvador made Bitcoin legal tender in the country. China has banned cryptocurrency completely. And every day, more and more people are becoming millionaires by selling NFTs.
But how and why is all of this happening? With the creation of blockchains, a new world of technology has opened up. And it’s available to everyone.
But how exactly does the blockchain work? And what is the best blockchain for newbies to start experimenting with? We cover all of that and more down below.
What Is a Blockchain?
At its core, a blockchain is a ledger. And it’s entirely digital.
Just like a business will have a ledger of transactions (usually contained in their bookkeeping software). They can track every transaction going in and out of the business.
But only that business (and the bookkeeping software provider) can see that ledger. The general public, the company’s investors, or the customers cannot see into the ledger.
With a blockchain, the ledger is completely online and open to everyone. And it doesn’t just track transactions for one entity. It logs every single transaction made on its network.
Think about bitcoin. Every day, millions of people are buying bitcoin, selling bitcoin, transferring bitcoin to other people, and buying goods and services with it.
The bitcoin blockchain records every single one of those transactions. They are stored in “blocks” that house a certain number of transactions. A new block is created every 10 minutes. And it just builds and builds as transactions continue taking place.
Types of Blockchains
Blockchains are beneficial because they are decentralized (open to everyone), and secure that’s to their consensus algorithm. No one is in control of the ledger, so no one can block or censor transactions.
But since no single entity is in control of it, the community at large is tasked with keeping it secure. This can happen through mining (like bitcoin), staking (like Cardano), or some other consensus method.
Getting Started With Distributed Ledger Technology
So how can newbies start using blockchain technology? The most popular methods are investing in cryptocurrency and buying (or creating) NFTs.
To do either, you’ll want the best cryptocurrency wallet to store your assets. A physical hardware wallet, like the Ledger Nano, is preferred to a software wallet which is more easily hacked.
Once you have cryptocurrency in your wallet, you can either hold it passively in hopes of it appreciating. Or you can invest in various Defi applications for a chance to earn lucrative interest rates on your crypto.
To learn how to best manage your Defi investment, click here.
You can also use that crypto to purchase NFTs off OpenSea, LooksRare, or any of the other NFT platforms that exist. While many NFTs aren’t worth anything, the best NFTs have the potential to skyrocket in value and earn you a pretty penny.
The Best Blockchain Technology Has to Offer
Crypto and NFTs are just one small way that blockchains impact our lives. The best blockchain technology has the potential to change entire industries for the better.
Just keep your eyes on those news headlines as you’re sure to see more and more adoption of blockchain technology in the coming months and years.
Looking for more information like this? visit our blog to continue reading.
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