Blockchain Basics: A beginner's introduction

What is a blockchain?

A blockchain is a digital registry that records transactions across a network, making them secure, transparent, and tamper-proof.
The traditional alternative to blockchain for recording and managing transactions was a centralized & controlled system where a single authority maintained a private ledger. The difference with blockchain technology is that it offers a decentralized and more transparent alternative.


There are various blockchain networks, with various purposes:

The first and most well-known cryptocurrency is Bitcoin, designed for peer-to-peer digital payments and decentralized financial transactions.

The second largest cryptocurrency, Ethereum, a blockchain platform that supports smart contracts and decentralized applications (DApps) beyond just cryptocurrency. It also contains the largest stake in Decentralized Finance (DeFi). Another blockchain with similar use cases to this is the BNB Smart Chain, providing the same use but with faster & cheaper transactions. 

There are plenty of other blockchains, similar to the above, some with more specific or alternative solutions. Some worthy mentions are: Solana, mainly known for NFTs (Non-Fungible Tokens), Polygon and Arbitrum. It is worth mentioning that all of these blockchains are listed on the StrikeX Wallet

image-removebg-preview (12).png



How do blockchains work?

When someone wants to add a transaction, like sending cryptocurrency, the network's computers, which are either validators or miners, verify it for validity.
Valid transactions are grouped into a "block" which is then linked to the previous block, creating a chain of blocks, leading to the name "blockchain."


What's the difference between Validators & Miners?

They are both key actors in their own respective blockchain system, and the roles vary depending on the blockchain's consensus mechanism.

Validators are common in PoS (Proof of Stake) blockchains, which is a consensus mechanism where validators are willing to stake (deposit) the native coin of the cryptocurrency. In return they are chosen with the blockchain's established mechanism to create new blocks & verify transactions., which are then rewards for their work with transaction fees. 
Bitcoin is the largest PoW (Proof of Work) blockchain, which is a mechanism where miners compete to solve complex math problems to create new blocks and validate transaction. This is similar to a puzzle, where it is designed to be computationally challenging, requiring extensive hardware power. Once an equation of the pending transaction, the block is broadcasted to the network for validation, other nodes in the network verify the proposed block and is then rewarded with the transaction fees in return.   

PoS is seen as a more energy-efficient and environmentally friendly alternative to PoW. It's widely used in many blockchain networks, including Ethereum's recent transition from PoW to PoS.


What do you need to perform transactions on a blockchain?

To perform transactions on a blockchain, you need two things: a digital wallet, such as the StrikeX Wallet and the gas token of the blockchain you'll be using, this is often the native coin of the blockchain. Your digital wallet is like a digital version of your bank account. It holds your assets (cryptocurrency) and has a unique address.

When you want to send money to someone, you use your wallet to create a transaction. You'll enter the recipient's address, which coin or token, and how much you want to send. 

Make sure you have the right cryptocurrency for the blockchain you're using. Different blockchains have their own currencies. For instance, if you're on the BNB Smart Chain you need $BNB (BEP-20), even if you are trying to purchase another token on the blockchain. Without it you will not be able to perform any transaction, as that is what is used to pay for the transaction fee, also known as gas.

Was this article helpful?
5 out of 7 found this helpful

Articles in this section