Simply put, a blockchain network is a type of database. Information is stored in blocks. Once a block is full of information, a new block is connected to the previous block and the new information starts to get stored there. All of the information is stored chronologically, so the last entry in the newest block is the most recent piece of data put there. A blockchain network has lots of uses, but they are most commonly used to store transactions for crypto-currencies and crypto-assets.

Unlike your typical network, which is stored on a big server, blockchain networks are usually stored on computers (called nodes) in many locations, all of which hold copies of the data on the network. This means that if one computer goes down then there is still a copy of the data and the network carries on without problems. This also means that it is impossible to delete data once it is on a blockchain network.

The decentralized nature of a blockchain network has given rise to a lot of concerns regarding the carbon footprint of running these networks. Fortunately, technology moves fast and this is becoming a thing of the past. Blockchain networks are now in their third generation since the first network was created in 2008, getting faster while requiring less hardware and less power to operate.

Blockchain is the technology that all crypto currencies run on.

A crypto currency is a form of tokens stored on a blockchain network. All transactions that happen with these tokens are stored on the blockchain network. Due to the nature of blockchain networks, holding a currency on one give rise to a number of benefits.

The currency we have in our pockets or bank accounts, be it the dollar, pound, euro, yen, etc are all what are called Fiat currencies. A common misconception is that the money we use today is backed by gold in big vaults, yet this is not true. Fiat money has no intrinsic value. Which is much the same as a crypto currency. However, this is about where the similarities end.

Since records on blockchains can’t be deleted it makes tracing illicit transactions much easier and quicker than if you were trying to trace a cash transaction, which could have passed through hands physically, through various intermediaries, banks, etc.

Crypto currencies have more divisibility than Fiat currencies. For example, a dollar has 100 cents. This can cause problems because you cannot always show somethings true value – if a sheet of paper is worth $0.005, you can’t give them half a cent. Crypto currencies have more zeros after the decimal point, which then allows you to give that person the half a penny for the sheet of paper.

Crypto currencies cannot be counterfeited or duplicated.

Banks can’t leverage the tokens they hold to create more like they do with Fiat currencies, which was one of the primary causes of the Great Recession in 2007.

Blockchain networks are normally managed by the community as a whole, through voting and governance – meaning they are run democratically. New coins cannot simply be printed and thrown into circulation. As an example, at the time of writing two thirds of the US Dollars currently in circulation were printed in the last 18 months, devaluing the currency.