Blockchain Technology - Learn about Blockchain and Web3 - Bitstamp

Here, we take a look under the hood of the technology behind blockchain to help you navigate through some key concepts.

If you are interested in diving deeper into what makes the world of Web3 work, you’re in the right place! Have you ever heard of blockchain hash? What about a reference client? We have the answers.

Have you ever wondered how upgrades to the Bitcoin network are done? You can read about how Bitcoin Improvement Proposals (BIPs) work and how they were instrumental in bringing important upgrades to the Bitcoin network, such as Segregated Witness (also known as SegWit) and the lightning network. You can also read about Schorr signatures and how they have helped Bitcoin scale to become a global and digital alternative to government currencies.

Perhaps you are curious about how the Ethereum network works. What is the Ethereum Virtual Machine (EVM) that makes it run? How does gas work? You can also learn about how sharding, sidechains, and layer 2 solutions are helping Ethereum scale to onboard thousands of new users into its economy.

Whether you’ve heard of all these terms or not, Bitstamp is here to guide you through your crypto journey and help you become an expert in blockchain technology. Start learning about the intricacies of this ecosystem.

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Centralized and decentralized networks

When Bitcoin introduced the world to blockchain technology, it started a global revolution. Blockchain technology provided a way to create decentralized systems for storing and transferring data.

Confirmed and unconfirmed blockchain transactions

The main feature of cryptocurrencies like BTC or ETH is that they are not issued by a central authority. There is no bank or government in charge of processing transactions. Instead, a network of independent nodes validates and confirms transfers of decentralized cryptocurrencies.

Do all cryptocurrencies use the blockchain?

Cryptocurrencies and blockchain technology are often regarded as the same thing. This makes it seem like a cryptocurrency cannot exist without an underlying blockchain technology. But is this really the case?

Exploring Decentralized Applications (dapps)

Decentralized applications leverage smart contracts running on blockchain to introduce new features and functionality to online apps, opening up new opportunities across industries such as finance and gaming.

How are BTC transaction fees determined?

Transactions in BTC take up space in the Bitcoin blockchain. Additionally, including them in a block also requires a certain amount of processing power on the part of the miners. For that reason, transaction fees have to be paid for each and every transaction in the Bitcoin ledger.

How does hashing work?

Blockchain technology is an intricate web of several technological innovations working together. Among the most important pieces of the blockchain puzzle is hashing.

The Intersection of AI and Blockchain

Both artificial intelligence (AI) and blockchain technology offer disruptive potential, and combined, they could provide further benefits.

The Role of Blockchain Technology in Supply Chain Management

Blockchain allows all parties in a supply chain to operate a shared ledger and use it as a single point of truth. This offers the opportunity to improve upon current systems, particularly in areas like product traceability and authentication of goods.

What are accounts on Ethereum?

In most of the world, you require a bank account capable of storing the currency that is native in your country of residence or work. Without this bank account, you would have nowhere to receive the funds owed to you. A similar situation holds true for ether (ETH) or virtually any other cryptocurrency out there. In order to receive and store ETH, you need an Ethereum account.

What are alternative consensus algorithms?

In order for blockchains to work, there must be a mechanism put in place to maintain network consensus. This is why we have consensus algorithms. Their task is to make sure the next block in the blockchain is agreed upon by the majority of the network nodes. Additionally, they make it harder to fork the blockchain if the fork is not backed by a majority of the network.

What are Bitcoin Ordinals?

Bitcoin Ordinals are a way for satoshis (individual units of bitcoin) to be numbered, identified, and even inscribed with information—transforming them into non-fungible tokens (NFTs).

What are blockchain bridges?

Blockchain bridges are tools that enable the transfer of assets and data between blockchains.

What are inputs, outputs and UTXO?

A Bitcoin wallet does not actually contain any bitcoins. Instead, it contains records of transactions. When you send “bitcoins” to someone, you are really just sending proof that you have made transactions that now constitute a positive account balance.

What are layer 2 solutions?

To cater to the ever-growing crypto community, blockchain developers are always on the lookout for new solutions to scale up their networks. There are several clever ways of dealing with the issue of scalability. One way to go about it would be to either increase block size or reduce block time.

What are oracles?

Oracles help bring real-world data on-chain, expanding the utility of blockchain-based applications and services. 

What are orphan, uncle and stale blocks?

A large part of the mainstream blockchain ecosystem relies on miners. Mining new blocks keeps the system running. Problems arise, however, when two or more miners mine a new block at a similar time. In this event, only one block will prevail as the block added to the main chain.

What are Schnorr Signatures?

Scalability has long been considered one of the biggest obstacles in the continued growth of Bitcoin. In order to accommodate the millions of users trading in bitcoin, the network must be scaled. There are numerous scaling solutions being developed to “speed up” Bitcoin. While layer 2 solutions have been attracting attention in the blockchain community, base-layer solutions are not to be neglected as they, too, can increase the network’s throughput substantially. Among these layer 1 solutions are Schnorr signatures. This article explores their operation and lays out the benefits of the technology.

What are sidechains?

Sidechains in blockchain technology are separate chains attached to the main blockchain. They were designed so as to move certain aspects of blockchain’s functionalities off the main chain. Even so, a sidechain is still linked to the main blockchain, enabling the two chains to interact with each other.