The basics of blockchain technology
The blockchain stores specified data in decentralized networks. This works by storing the data in blocks that are strung together. These blocks are then stored in all computers that are connected to this network. Cryptographic methods are used to keep this block sequence the same and even recognize if they are subsequently attempted to be manipulated. The so-called consensus mechanism keeps all computers on the same status of the blockchain. Different cryptocurrencies have different consensus mechanisms.
The most popular are proof-of-work which is used by Bitcoin or proof-of-stake which is used by Ethereum. Solana for example uses a combination of the proof-of-stake and a proof-of-history mechanism.
Advantages and possible applications
Blockchain technology conceals many advantages and possible applications. The advantages are, for example, the speed and security behind it. Data stored on the blockchain is immediately distributed to the entire network, which offers high speed. The encrypted data on a decentralized blockchain means that it is well protected. Furthermore, the consensus used, verifies the data and thus protects it from manipulation. A big advantage is also the transparency, everything that was ever done on the blockchain is visible for everyone.
Another point is that the network is protected against total failures, as all important information is collected in the blockchain nodes, and all information can therefore be restored.
However, blockchain is not only used for cryptocurrencies, but also in many other areas.
For example, in healthcare to create digital medical records or in the food section where it can be used to follow the production lane in a digital way. It is also used for identity checks, to prevent money laundering or to create insurance contracts by creating smart contracts. People even can buy fragmented parts of real estate trough on-chain saved contracts.
Significance for centralized exchanges
The blockchain is very essential for centralized exchanges. On the one hand, just like the centralized exchange, you can view your transactions, which offers you transparency, and you as a user can track everything. This also allows the central exchange to trace all transactions and see where the money comes from so that it does not have an illegal origin. Furthermore, the central exchange can recover your password if you have lost it. Uptota for example, is a centralized exchange for Africa. Find more information here: www.uptota.com/exchange
Future developments and trends
The future of blockchain is already within reach. Not only is blockchain technology being used in the crypto space, but it is also expanding into industry and the service sector. It will even be used more and more in the healthcare sector in the future, making work more transparent, faster and more secure.
