What is blockchain?

What is blockchain ?

Blockchain is a way of storing information along the chain. Records of transactions of network participants are encoded, distributed among other participants and form interconnected blocks. If someone tries to make changes to get the currency in an unfair way, for example, to rewrite an existing transaction or create a new one without the consent of other participants, the system will compare this information with other databases and block the operation.It's like having your bank branch on your computer.In order to make transactions, you need to keep the network in working order — this is done by miners. They give their computing power to the system to produce new blocks and coins, and receive a percentage of operations. The creator of the blockchain himself determines how many resources a miner must provide in order to receive a reward. All participants in the cryptocurrency issue are endowed with equal rights and opportunities.The developers put a limit on the issue of cryptocurrencies in the system — for example, only 21 million bitcoins can be produced.

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Digital currency is divided into coins and tokens.Coin. This is a monetary unit of cryptocurrency that operates in its own blockchain. It can be obtained by mining - providing the system with the computing power of your computer. Coins can be transferred to other users of the blockchain system and sold for ordinary currency. Some companies accept them as payment for goods and services. For example, Microsoft sells the Windows operating system and the Xbox game console for bitcoins.There are coins that work on the rewritten bitcoin blockchain. They are called altcoins - alternative versions of bitcoin.Token. This cryptocurrency currency is created on the basis of an existing blockchain. They cannot be obtained, but you can buy or get them for activity. Tokens, even in theory, cannot be paid, they are used to give the user access to the platform's functions. If a coin is a bill, then a token is a ticket. But if you withdraw the token to the exchange, it can be exchanged for ordinary money at the current exchange rate.

Tokens can be used as a tool for investment and a certificate of the right to business, with their help you can participate in voting or polls.Tokens have more opportunities, but coins are more valued among investors: they are more difficult to create.

How to get cryptocurrency ?

To store coins or tokens, you need an electronic wallet. There are several ways to fill a wallet with cryptocurrency.

Mining. Creation of a new network block, for which a reward is accrued. To do this, it is necessary to provide the system with its own computing power. If at the beginning of the appearance of cryptocurrencies it was possible to mine from a regular PC, now the network level has become more complicated. There were special devices — mining farms. Individual users combine the power of their computers and create associations of miners.Staking. If the income in mining depends on the power of the equipment, then in staking it depends on the number of existing cryptocurrency coins. This is a kind of investment: the owner sends coins to the blockchain service and receives a reward for it.Purchase. Cryptocurrency can be bought. To do this, there are exchangers where those who wish to sell and buy digital coins for another cryptocurrency or for the national currency. You need to pay a commission for the exchange.An alternative without commission is p2p exchangers that allow you to transfer money from person to person, without intermediaries. For their use, verification is required — disclosure of their passport data.Trading. Cryptotrading is similar to regular trading. It is based on the principle of "buy cheaper and sell more expensive". The high volatility of the price of cryptocurrencies allows you to make quick deals. Trading is carried out on trading platforms.

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