Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. It’s a network of computers, keeping track of all transactions that happen within it, generating a huge ledger of information - basically who is the owner of what.
Each block contains a number of transactions, and anytime a new transaction happens on the blockchain, a record of that transaction is added to every participant’s ledger, that’s why the tokens are so huge! It’s a new block that is added to the chain of information! Easy, right?
Proof of Work (PoW) and Proof of Stake (PoS), what are those?
Now that you know what’s a blockchain, let’s talk just for a bit about the two ways blockchains process your transactions. First of all there’s no change on your digital properties (NFTs, cryptos, etc.) no matter which it’s used to validate the transactions. That being said, it’s cool to know the main differences - and not get confused when seeing these terms.
- Proof of Work is a way to validate transactions that consume big amounts of energy in the form of computer power (hence the “Work”). It’s very secure and proves consensus in a decentralized form, which makes it almost impossible for anyone to change anything on any transaction. The “computer power” comes from the famous miners, and because of that dependence PoW is comparatively slow.
- Proof of Stake is a different way of proving consensus. It requires way less energy, since the stakers - same as the miners for PoW - are randomly picked to verify transactions, putting part of their funds to do it. It’s also extremely secure and most blockchains that use this method also have extra security features hidden in their network.
There are other forms to process transactions - or achieve consensus - on the blockchain, want to know more about it? Check this link: Consensus Mechanism