For a beginner participant in the cryptocurrency market, a lot can be incomprehensible. The abundance of terms in specialized articles only complicates the process of studying information. Therefore, to understand what blockchain and Bitcoin are, and what is the difference between them, is not an easy task. In this article, we will look at both terms in detail, and get acquainted with a convenient way to buy cryptocurrency.
What is blockchain
First you need to understand how the underlying technology of the main cryptocurrency works. It is what is called the blockchain. The term is formed from two words - a block and a chain. Thus, the literal translation of the term is ‘a chain of blocks’.
Blockchain is, in simple words, an equivalent of a ledger. It includes records of all transactions that take place on the network. Since cryptocurrency is used by a huge number of people around the world, there are a lot of such records, and their number is constantly growing. Therefore, the information is divided into blocks, which can be represented like pages in a ledger.
Blockchain technology has the following advantages that make it reliable:
- The information is distributed. Records of all completed transactions are stored on the computers of all network participants. Therefore, the information cannot be faked. A user cannot hack the system by adding a couple of zeros to his balance. If he tries to do this, the data from his copy of the ‘ledger’ will not match the information of other members of the network. Thanks to this, computers of other users will see that the data is faked and will reject invalid transactions.
- Decentralization. This feature is derived from the previous one. Since the operation of the network is controlled by all of its participants at once, there is no single supervisory authority over blockchain. Governments, banks and other organizations cannot influence the functioning of the network.
It is important to understand that all blocks are connected to each other in a consistent and encrypted way. If a change is made even to a long-form block, it will immediately affect all subsequent blocks. Because of this, as mentioned above, the chain on the user's computer will change and will be rejected by the computers of other network members.
How new blocks are added to the blockchain
A new block appears about once every 10 minutes as a result of mining:
- Users who want to participate in the blockchain connect their computing equipment to it.
- After that, their computers, along with those of other participants, begin to automatically check the transactions taking place on the network.
- Then, one of the miners' computers, which solved the problem first, forms a new block. The computers of other network participants confirm its correctness.
- As a result, the block is added to the general chain, and it becomes impossible to change it, so miners proceed to the formation of the next block.
It is important to understand that mining is done automatically according to the rules prescribed in the blockchain protocol. People themselves can only connect their equipment to the network, which will then work without human involvement. Users benefit from participating in the mining process, since the miner is rewarded in bitcoins after a new block is formed.
Bitcoin blockchain is open source. This means that any user can study how the network works and make sure that it is virtually impossible for anyone to tamper with it. The only exception is a 51% attack, which is described in other articles.
What is cryptocurrency
Cryptocurrency is a digital form of money. The use of blockchain for transfers is a prime factor that allows an exchange medium to be called cryptocurrency. This is the main difference between cryptocurrencies and traditional fiat currencies (rubles, dollars and others), which are regulated by governments and banks. Regulation in itself is not a bad thing, but it does come with some disadvantages for the average citizen:
- A bank can block any money transfer and demand an explanation of the origin of the funds;
- A state can uncontrollably print any amount of money at its discretion, which gradually depreciates it.
Cryptocurrencies are decentralized (as described above) and are not regulated by anyone. Each of them runs on its own blockchain, and it is its code that determines how the digital asset can be used.
What is Bitcoin
Bitcoin is the first cryptocurrency to become ‘digital gold’. There are many other currencies now, more sophisticated and technologically advanced. However, it was Bitcoin that appeared first, due to which it is so highly valued. And the more people believe in its independent and decentralized system, the stronger the cryptocurrency rate grows.
Thus:
- Bitcoin is the first cryptocurrency that is a medium of exchange. Bitcoins can be received and sent, stored, used as a payment instrument and so on. Now, it is a full-fledged replacement of the usual money.
- Blockchain is the technology (database) that runs cryptocurrencies like Bitcoin.
Another advantage of the first cryptocurrency is a limited number of coins. No one can just up and ‘print’ additional Bitcoins. Coins appear only as rewards for miners, in the number set by the creator of the blockchain at the time of its launch. When the number of Bitcoins received by miners reaches 21 million, the creation of new coins will stop.
Ways to get bitcoins
Since you are interested in Bitcoin, you have probably wondered how to get your first coins. There are several ways to do this:
- buy through an exchanger;
- buy it on a professional trading platform;
- become a miner who keeps the blockchain running.
It is more convenient for a beginner to buy cryptocurrency through an exchanger. But it is important to find a reliable and understandable platform that is friendly to novice users.
The Broex exchanger meets all these requirements. It allows you to:
- quickly buy Bitcoin and other cryptocurrencies;
- store the acquired assets;
- sell assets when the price goes up.
Broex has a user-friendly interface in Russian. At the same time, there are no unnecessary functions on the website that can confuse a novice user. If you have a question about using the platform, you can immediately consult with an operator. Technical support works around the clock, and users' problems are solved in minutes.
Also, Broex exchanger has the following advantages::
- License. The company is registered in Estonia, has passed all regulatory checks, and works officially. So there is not a single reason to doubt the reliability of working through Broex.
- Replenishment in a comfortable way. You can deposit money with a bank card, as well as other ways, for example, through ADV cash. Funds are credited to the user's account immediately.
- The minimum deposit is 1500 rubles. To invest in Bitcoin or other cryptocurrency, you can use a small amount.
- The fee for the exchange starts from 0.1%. Apart from that, many operations are carried out without any commission at all. So you don't have to worry about the exchange ‘eating’ some of your funds. Buying with Broex is not only convenient, but also profitable.
- Access from your computer or mobile phone. You can use the exchanger through your browser and through your smartphone app.
In addition, with Broex you don't have to worry about storing your cryptocurrencies. The exchanger provides a custodial wallet. This means that the company itself takes care of the safety of users' assets. You will be able to access your Bitcoins not only from your computer, but also from your smartphone.
Try Broex if you have not yet decided which platform is the best option for buying cryptocurrencies. The exchanger is really simple, convenient and reliable. Using it, you will get rid of unnecessary difficulties and be confident in the safety of purchased Bitcoins.
