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Blockchain Technology Explained: What Is Blockchain? 

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Blockchain Technology Explained: What Is Blockchain? 

Blockchain Technology

From the time it was invented, blockchain technology has had the entire world in awe of its impact across industries. It is the brainchild of a person or group of persons known by the pseudonym, Satoshi Nakamoto. You may have heard about blockchain but don’t understand the concept and how it works.

Also read: How to Invest in Bitcoin

This article’s essence is to provide you with a complete guide on the concept of blockchain technology. In this article, you will learn what blockchain is, its underlying characteristics, and current uses. We will also delve into the future potential of blockchain.

What is Blockchain Technology?

Blockchain is a system for recording data/information that ensures the recorded data cannot be tampered with. It is a digital ledger of distributed, duplicated, and distributed transactions across a network of computer systems. Each block on the blockchain network contains a particular number of transactions. When a new transaction occurs on the blockchain, the record of such transaction is added to every participant’s ledger.

Blockchain is a type of decentralized ledger technology where you can record transactions with an immutable cryptographic signature called “hash.” A decentralized ledger technology (DLT) is a distributed database that is managed by several participants. It implies that once a block in the chain is changed, it will be evident to everyone within the network.

For hackers to corrupt a blockchain system, they would have to alter every block in the chain and across all distributed versions of the chain. Blockchain technology networks like Bitcoin and Ethereum are continually growing because blocks are added to the chain. The addition of new blocks to the blockchain system helps to improve the security of the ledger.

The blockchain system is an ingenious way of passing information from point A to point B in an automated and safe manner. One of the parties to the transaction initiates the process by creating a new bloc. This new block will be verified by several computers distributed around the internet. Once the new block is verified, it is added to the chain and stored across the internet.

The newly added block creates a unique record with also a unique history. Falsifying a single record means you will have to falsify the whole chain in millions of ways. Therefore, it is practically impossible to falsify a record stored on a blockchain network.

Will Blockchain Technology Become The New Internet? 

By allowing us to distribute but not copy digital information, blockchain technology has created a new internet foundation. Although it was initially developed for digital currencies (cryptocurrency) like Bitcoin, Ethereum, etc., the tech community has found other use cases for blockchain.

With its industry-disrupting capabilities, the full potential of blockchain technology is yet to be fully understood.

The Characteristics of Blockchain

There are three main characteristics of blockchain technology that has helped it gain widespread acceptance across industries. They are known as the three pillars of blockchain technology, and they are as follows:

  • Immutability
  • Decentralization
  • Transparency

Immutability

In the context of blockchain, immutability means no one can tamper with what has been recorded on a blockchain network. You can imagine the value of blockchain’s immutability in financial institutions. There will be lots of embezzlement cases that will be nipped in the bud with blockchain’s immutability. People can no longer “work the book” or mess with company accounts.

The cryptographic hash function of blockchain makes it immutable. Put merely; hashing is the process of taking an input string of any length and giving out an output with a fixed length. Regarding cryptocurrencies, the transactions are seen as an input and run through a hashing algorithm. Bitcoin uses an SHA-256 hash to generate an output of a fixed length.

Let us see how the hashing process works. We shall use the SHA-256 (secure hashing algorithm 256) to put in specific inputs.

 

Input Hash
Hello 3639BDEF07ERH253B1645F42E98GY9A7DF02D2041A1830A88BD294EDEE224C8
Welcome to entorm. We are happy to have you here 4673CDBE34DCB332A156E31D89BDC77DB234AAE7132EDB8863CAD234DDE19

 

 

 

As you can see, irrespective of how big or small your input is, the output will always have a fixed 256-bits length. It becomes more critical when you are dealing with a massive amount of data or transactions. Therefore, instead of remembering the input data, which can be huge, you can remember the hash.

The cryptographic hash function is a particular class of hash function with properties that ideal for cryptography. For it to be considered secure, a cryptographic hash function must have certain properties. One of these properties is the “Avalanche Effect.” It means that even if you make a little change in your input, the effect on the hash will be enormous.

INPUT HASH
How are you? BDE24367ECC676AACDE98DEAC33725CD6VA5CS354ADD224EA6C54CCVD345
how are you? CC367AA923DE356476DEA556ADC992CE123DD980ABB432DB76EB99ADE6642

 

You can see how the hash changed significantly just by changing the first alphabet of the input.

Also Related: How I made over $7000 in 28 days investing in Bitcoin

Decentralization

Before the advent of Blockchain technology and Bitcoin, all you know was centralized services. In a centralized service, you have to interact solely with the entity that stores all data to get any information you need. An excellent example of a centralized entity is the banks. The traditional client-server model is a perfect representation of the centralized system. 

With blockchain comes decentralization. Therefore, information or data is no longer under the control of a single entity. Everyone owns the information stored within a blockchain network. In a decentralized network, you can transact with your business partner without the need for an intermediary. You can send money to anyone, anywhere around the world without having to go to the bank. 

Transparency

You hear people say that blockchain technology gives you privacy while others talk about its transparency. How can we reconcile these two attributes of blockchain? Your identity is safely hidden through complex cryptography, but your public address represents you. 

Therefore, if I were to look up your transaction history, I will not see Dave sent 1BTC. Instead, what I will see is your public address (e.g., 1MF1sFG5467GVT89sec99esd5 ) sent 1BTC. With your public address, I can see all your transaction history. Such transparency has never existed before within a financial system.   

How To Maintain The Blockchain Network

A peer-to-peer network maintains the blockchain system. This network is a collection of nodes that are connected. Nodes are individual computers that take in inputs, work on these inputs, and output. The blockchain system has equally privileged participants called peers. These peers must maintain the integrity of the blockchain network. 

Application Of Blockchain Technology 

There are several use cases of blockchain technology from the creation of smart contracts, simplification of the supply chain process, food security, and so much more. There is arguably no sector or industry that there is no possible application of blockchain technology. In our subsequent article, we shall be exploring the use of cases of blockchain technology fully. 

Conclusion  

The impact of blockchain technology within the last five years has been enormous, and the future potential is not in doubt. It will undoubtedly revolutionize how we do business and transact with one another.

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What is Cryptocurrency And How Does It Work? 

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Obiex finance website

Cryptocurrencies are decentralized digital assets that operate on blockchain technology that in turn operates by storing a ledger of every transaction on all nodes powering the blockchain. 

In layman’s terms, blockchain technology is like a record keeper, it collects data (in blocks) and links one block of data to another, forming a chain. The data on the blockchain is open for all to see and cannot be easily altered. Blockchain technology can be used for a variety of use cases besides cryptocurrency, ranging from voting to crowdfunding, keeping health records, etc.

Using Bitcoin as an example, nodes are computers connected to the network to mine Bitcoin,  – this collection of independent nodes working together is what makes the network decentralized.

The decentralized nature of cryptocurrency is down to the creators recognizing flaws in traditional banking & financial systems like governments and financial institutions acting only in their best interests and not in the best interest of the common man, leading Satoshi Nakamoto (the creator of bitcoin and blockchain technology) to take steps to rectify that.

Related: What are NFTs?

To make cryptocurrency transactions, you will need to have a set of both public and private keys that will act as passwords protecting your crypto wallet. 

The Public key is connected to your wallet address, allowing you to share the address with others to receive cryptocurrency, while the private key is known to only you and is what you will use to approve outgoing crypto transactions from your wallet. 

Trading Cryptocurrency on Obiex

Obiex finance website

With the popularity of cryptocurrency trading currently at an all-time high, the biggest challenge for many rookie traders is selecting which cryptocurrency exchange to trade on.

If you fall in this category, the immediate priority should be finding an exchange that allows rookie traders to make trades easily, doesn’t charge extra fees and is completely secure. That exchange is Obiex Finance.

In this guide, you will be shown how to navigate the Obiex mobile app & website easily and what to do to get started with making cryptocurrency trades. 

Getting started with Obiex Finance 

Obiex Finance is a digital asset exchange and financial technology (Fintech) platform that gives its users the ability to easily execute cryptocurrency trades from anywhere regardless of their skill level.

Their commitment to ensuring that users get the best experience is shown in how they allow instant swaps from volatile coins like Bitcoin to stable coins like USDT, and vice versa, without confirmations. In a market where the value of crypto can fluctuate wildly, this feature is especially valuable as it allows users to seamlessly switch between making profits to saving those profits in a more stable currency before the value drops.  

To create an Obiex Finance account, simply head over to their homepage, click on “sign up”, fill in the required fields and verify your email address. After that, create wallet addresses for your crypto assets and you’re ready to start trading!

The cryptocurrency available for trading on the Obiex Finance platform are: Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Polygon (MATIC), Dogecoin (DOGE), Tether (USDT), Binance USD (BUSD), and USD Coin (USDC).

Getting Started with Cryptocurrency trading

After creating your Obiex account, you need to follow these simple steps:

  1.     Have a Trading Strategy: Trading cryptocurrency without having a strategy in place is the easiest way to lose your money. You will need to research the various crypto trading strategies thoroughly and choose the one that best suits your needs and temperament. For example, if you’re a patient person who is content to make smaller, safer trades over a long period of time instead of making riskier trades, then scalp trading is the best trading strategy for you. There are also other crypto trading strategies such as Swing trading, position trading, Arbitrage, dollar cost averaging etc.
  2.     Pick the cryptocurrency you’d like to trade: There are several cryptocurrencies available on Obiex Finance such as Bitcoin, Ethereum, Binance Coin, Tether etc. Selecting which cryptocurrency to trade is usually down to making a choice; whether to stick with the safer, more established cryptocurrencies like Bitcoin or to go with the more volatile coins that have a high upside and an equally high-risk factor like the Dogecoin which can move in either direction based on what Elon Musk tweets.

It is also important to note that when you pick a cryptocurrency to trade, it would be wise to ensure that the cryptocurrency matches the strategy you pick. For example, if your preferred strategy is patient scalp trading, then investing in volatile coins that have a high upside but carry a lot of risk is not the wisest move. 

To swap crypto on Obiex Finance, add the wallet of crypto assets you’d like to swap, send the crypto to the wallet you just created, navigate to the ‘swap’ option on your dashboard, and select the coins you’d like to swap. You will receive the swapped coin in your wallet balance immediately without waiting for network confirmations.

  1.     Securely store your cryptocurrency: The same way you’d protect your goods and profits if you had a physical store is the same way you need to protect your cryptocurrency so it doesn’t fall into the wrong hands.

You can store your crypto securely on your Obiex wallet but if you want an alternative, physical wallets are also an option. Physical wallets allow you to store your crypto in secure hardware, offline storage device reducing the likelihood of online hackers stealing your hard-earned crypto. This is a list of reliable physical wallets you can use.

Conclusion

If you’re a newbie to crypto trading, the keyword is patience. Taking the time to properly understand the market before making trades will stand you in good stead. While risks occasionally pay off, a patient, long-term strategy is required to make consistent profits. For more information about trading as a newbie, you can check this out to understand unfamiliar crypto terms and to learn more about spot trading and futures.

Obiex Frequently Asked Questions | Obiex FAQs

  • Will I be charged a fee when I swap coins on Obiex? 

No you won’t. While other crypto exchanges charge for trades and require confirmations to execute swaps, Obiex allows you to make free, instantaneous swaps without the delay that comes with waiting for confirmation. This also helps you avoid unnecessary losses.

  • Can I trade crypto on Obiex if I don’t know much about crypto? 

Yes, you can! The Obiex Finance platform allows both rookie and experienced traders to make easy, safe trades regardless of trading experience.

  • Can I send and receive crypto easily?  

Yes, you can. To send crypto, you will use your private key to execute outgoing trades and your public key/your wallet address to receive incoming trades. You can also send and receive crypto using just Obiex usernames.

  • Why do I need to swap coins? 

Swapping coins allows you to either acquire a coin you think is (currently) more valuable than a coin you have a lot of. You can also use swaps to ensure that your funds are invested in a more secure coin like USDT if you feel the volatile coin you’re holding is about to go on a bear run and lose value.

  • Do I get a referral bonus when I invite friends to use Obiex? 

Yes, Obiex has a referral campaign that rewards users that invite their friends and family to trade the minimum of $10 on Obiex.

 

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