How does blockchain technology work?
BlockchainA blockchain is a type of distributed ledger technology. It is a huge database formed by blocks,cryptographically linked to each other, containing information such as transactions. These blocks are addedfollowing technology records data in a decentralised and transparent way, using a computer protocol organised by consensusTruth admitted by all system participants. This doesn’t imply that it is the absolute truth or that it’sindisputable, it is the truth participants agree on. In crypto, algorithms beginning with into a chain of blocks. The blockchain is like a large shared ledger.
Popularised by crypto-currencies (crypto-assets or digital assets) such as Bitcoin, it works through a mechanism called “mining”, carried out by miners. Each individual block is linked to the previous block to form a blockchain. The principle is that all miners have access to an identical copy of this block chain. When a minerIn a Proof of Work system, miners contribute to determine the blockchain consensus, respecting the blockcreation protocol by being the first one to complete the current difficulty level and submitting adds new information, it is checked and validated by everyone. This is the consensus process, in which all miners must agree on what is added to the ledger.
Validation is based on a calculation mechanism (carried out by the miners) that differs from one blockchain to another. For example, some projects, such as Bitcoin, use Proof of WorkOldest consensus algorithm, on which Bitcoin is based. On public blockchains, the consensus algorithm choses the block that is added to the blockchain at a given time and the “truth” (PoW) to validate transactions by solving complex mathematical problems (often linked to energy consumption). Other projects use Proof of StakeBlockchain consensus mechanism attributing the consensus determination by adding blocks to the blockchain to master nodes, having a certain number of coins of this blockchain. This amount is always indicated (PoS), in which the validators, known as “stakeholders”, stake a certain amount of cryptocurrency in order to have the right to propose and validate a block (as has been the case for EthereumSecond most important crypto asset by market capitalization. Ethereum blockchain has been launched
in 2015 by Vitalik Buterin, it is also used for other applications such as DeFi and NFTs. since its network was updated). The more cryptocurrency a user has put into play, the more likely they are to be chosen. Other validation mechanisms exist and are chosen according to the objectives of the blockchain project.
Cryptocurrencies or digital currencies are terms commonly used in the crypto ecosystem. However, the terminology favored by regulators (ACPR and AMF) is crypto-assets or digital assets. This distinction arises because, although often referred to as cryptocurrencies, these assets do not qualify as currencies in the legal sense. They are virtual resources based on blockchain technology, whose value is determined solely by supply and demand.
None of the information contained in this FAQ constitutes investment advice, tax advice, legal advice, or any other type of advice, nor does it serve as an invitation to engage in any form of financial transaction.
Investing in digital assets carries risks and may not be suitable for all investors. It is the responsibility of investors to educate themselves about the risks associated with different digital assets. In particular, it is noted that digital assets can exhibit significant volatilityPrice variation of an asset on a given period., and investments in digital assets involve a risk of capital loss. Accordingly, it is important to remember that the past performance of digital assets, as might be indicated on Banque Delubac & Cie’s website or in documents provided to investors, is not indicative of future performance. Investors should familiarize themselves with the technologies underlying each digital asset and their associated risks, including vulnerabilities, defects, hacks, errors, protocol failures, or attacks on the protocol. Banque Delubac & Cie cannot be held liable for any misunderstanding of the risks associated with digital assets or for any losses investors may incur due to errors in walletPrice variation of an asset on a given period. addresses attributable to the investor.
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