Understanding The Blockchain
What is the Blockchain? - Understanding Blockchain Technology & Crypto
Cryptocurrency is seen by many as the future of finance, and the impact of blockchain technology has been significant. Millions of people now use cryptocurrency for online transfers and even crypto gambling.
Stake.com is the world’s leading crypto gambling platform , but before you get started, it’s important to understand how it works. The main technology behind the success of cryptocurrency is known as the blockchain, and in this guide, we’ll explain exactly what it is and how it works.
What is a Blockchain?
A blockchain is essentially a shared database which stores data on blocks that are linked together. The blockchain is distributed across a peer-to-peer network of connected computers, with the act of distribution ensuring that changes are immutable.
Any kind of information can be stored on a blockchain. Although its main use is in cryptocurrency and recording financial transactions, it can also be used for supply chains and logistics. The immutable nature of blockchain technology makes it particularly suitable for financial records, as it reduces the need for auditors or trusted third parties.
Every blockchain has 3 main characteristics:
Cryptographically secure – Blockchains are designed to be highly secure, with users needing cryptographic keys to access certain information. A public key is the database address, while a private key is used to authorise transactions through cryptographic techniques.
Digital – All blockchains are fully digital and are accessed through a connection to the internet. Without digital technology, it’s not possible to utilise the blockchain and digital currencies or access the information it contains.
Shared on a network – Every blockchain is also shared across a network, with other computers on the same network verifying the information and any new blocks that are added. This network might be private or public, although there are also examples of hybrid blockchains which combine private and public. The Bitcoin network is one of the most well-known examples of a public ledger.
How Does Blockchain Work?
Like a database or spreadsheet, blockchains are used to enter and store data in a digital ledger. However, the way that the data is structured and accessed is very different in a blockchain compared to traditional databases.
When you conduct an action on the blockchain, such as sending cryptocurrency, scripts automatically record the transaction data on a block. The size of the block and the process for verifying and recording data depends on the type of blockchain network you use. However, all other aspects of the blockchain work in the same way.
The entire blockchain is distributed between all computers on the network, and each copy must match for it to be valid. This creates a decentralised blockchain and ensures the record of transactions is accurate without the need to put your trust in a company or service running the network.
Some cryptocurrencies on Stake can be sent over more than one blockchain network, although it’s important to check to see whether the network you’ve chosen supports the cryptocurrency you’re trying to transfer.
Bitcoin Network
When using Bitcoin to send or receive coins, your transaction details are sent to the memory pool, a network of peer-to-peer computers located around the world. Mining computers then solve cryptographic equations to verify the transaction and record the details in a block. Once confirmed, the transaction is complete, and the data is available on all copies of the network.
Each Bitcoin block contains 4MB of data, and once the block is full, the data is passed through a cryptographic hash function, creating a block header. The block header from the previous block is then used to create a chain of blocks, and mining computers involved in this process receive a reward of mined Bitcoin. This process is known as Proof of Work (PoW).
Ethereum Network
Although the Ethereum network shares some similarities with other cryptocurrency blockchains, such as Bitcoin, it also has some major differences. The key difference is that rather than using Proof of Work, it uses Proof of Stake (PoS).
Computers on the Ethereum network can stake ETH to become validators, and each time a transaction needs to be verified, one validator is chosen at random. This ensures transactions can be processed quickly and without relying on computing power and energy usage.
How Does Blockchain Technology Relate to Stake?
Stake is focused on providing users with the best possible crypto gambling experience. We currently accept over 20 different cryptocurrencies , and many of these digital assets can be sent over multiple networks.
Each cryptocurrency accepted at Stake has its own features and advantages, and they can be used to make deposits and withdrawals. In addition, it’s possible to use crypto when playing casino games and making sports bets.
When making transactions at Stake, ensure you choose the right network and check that it’s available from our list of acceptable blockchain networks . Some networks might be faster and offer lower fees, but the cryptocurrency will need to be supported by the network you use.
Is Blockchain and Cryptocurrency Secure?
Crypto gambling is safe , provided you take the right precautions to protect your coins. As a licensed gambling platform, Stake takes measures to ensure you’re protected when you sign up, deposit and play. However, you can follow this security advice to keep your coins safe:
Use strong passwords – Make sure your Stake account is secured with a strong password when you first sign up. You can also add two-factor authentication to your account.
Store your coins properly – If you’re keeping your cryptocurrency away from Stake, you’ll need to create a wallet to keep them secure. Cold wallets are offline and the safest option, although hot wallets allow you to access your crypto more easily. If Bitcoin is your chosen crypto, read about storing Bitcoin securely on our blog.
Keep your private keys private – If you create a wallet to store and access your cryptocurrency, save your private keys and avoid revealing these to anyone else.
Use the Stake Vault – An alternative to using a crypto wallet is storing your coins in our vault. This adds an extra layer of protection to your funds, keeping them safe and adding two-factor authentication.
What are the Benefits of a Blockchain?
There are lots of benefits of using blockchain and cryptocurrency, including:
Trustless transactions – The nature of the blockchain means it operates without the need to trust a third party or middleman service. The transactions are verified and recorded by an automatic process that can’t be manipulated.
Lower fees – Because there’s no need for middlemen, transferring funds with crypto is almost always cheaper than sending the equivalent of local currency. When making deposits or withdrawals, you won’t have to worry about transaction fees.
Fast transactions – Using the blockchain is also generally much faster than traditional banking services. Individual transactions are verified and confirmed on the blockchain in just a few minutes, and you can often choose the network with the fastest confirmation time.
How to Bet with Cryptocurrencies on Stake Casino & Sportsbook
Making bets with virtual currencies, including Bitcoin, Ethereum, Litecoin , Tether , Dogecoin , EOS and more, is incredibly simple at Stake. However, we have lots of how-to guides and detailed instructions on how to sign up, make deposits and place your first bets.
Both our online casino and sportsbook allow crypto bets, and you can get started by following these steps:
Create an account or log into your existing account if you have one.
Check your available balance and make a deposit using your preferred cryptocurrency.
Open Stake sportsbook or casino and choose a game or event to bet on.
Read one of our guides to find out how to play and check the odds or house edge .
Use our Stake Smart calculator to determine your responsible gambling budget.
Have fun placing bets and claiming bonuses , and cash out your winnings whenever you want.
More Crypto Resources
If you want more information on how to use Stake and cryptocurrency, you can check out our crypto-related articles. Our help centre is also full of useful information, including how to deposit crypto , deposit limits and how to purchase cryptocurrency at an exchange .
Head over to LearnCrypto.com for tools and academic resources on the most popular coins and cryptocurrency news.
If you’re unsure about anything, our support team is available to assist.
