In the crypto environment, blockchain serves as an indispensable technology. The term blockchain’ refers to a distributed database that is shared among a number of nodes of a computer network. Blockchain is unlike any other database because of how the information is stored in it. Blockchain technology is capable of storing data in blocks that are connected to each other via cryptography. If you are passionate about cryptocurrency and want to broaden your insight on the subject, you must understand the use of blockchain in cryptocurrency.

Build your identity as a certified blockchain expert with 101 Blockchains’ Blockchain Certifications designed to provide enhanced career prospects.

What is Blockchain technology?

Are you curious to explore how does blockchain work in cryptocurrency? If yes, you will get an answer to the question. But before addressing the question, you need to have clarity on blockchain technology. A blockchain is basically a decentralized ledger relating to all transactions across a peer-to-peer network. By using the technology, participants can easily confirm transactions instead of relying on an intermediary or central authority.

Blockchain technology is full of potential and promise. Although it is in its nascent stage, its application is expanding with each passing day. Some of the main areas where blockchain is already making its presence felt are finance, healthcare, supply chain management, and asset management. Another important area where the contribution of blockchain technology is of immense value is cryptocurrency. 

Undoubtedly, cryptocurrency is among the most popular and prominent blockchain application areas. Blockchain in cryptocurrency is responsible for powering popular cryptocurrencies such as Ethereum and Bitcoin. In fact, cryptocurrencies rely on blockchain technology to keep a tab on all the transactions involving currency holders. Are you still having the question – how does blockchain work in cryptocurrency? You need to get familiar with the key features of blockchain before diving any deeper.

Begin your blockchain journey now with the Blockchains Fundamentals Free Course

Features of Blockchain technology

Blockchain technology has a number of features that help it stand out from other kinds of new and emerging technologies. The core features of the technology make it a perfect digital tool in the cryptocurrency domain. 

  • Immutable nature 

Blockchain is a permanent network that cannot be altered. After the recording of a transaction takes place on blockchain, it is not possible to modify or remove it. Hence, it acts as a ledger that cannot be tampered with. The immutable dimension of blockchain in cryptocurrency is of immense value.  Any record that has been validated on the blockchain network stays on it as there is no way of changing, editing, or eliminating it.

  • Distributed ledger 

As blockchain is a distributed ledger, the participants within the network can have a copy of the ledger with them. It provides them with all the information about the transactions, thereby ensuring complete transparency. In the digital realm, the use of blockchain in cryptocurrency is a fundamental necessity as it promotes transparency.

  • Absence of an intermediary 

Blockchain is a decentralized system. It implies that no central authority exists within the network. The specific feature strengthens the connection between cryptocurrency and blockchain technology, thereby making the verification and validation of transactions highly efficient. Due to the absence of a central authority in blockchain, the speed of the transactions is high.

  • High degree of security 

One of the chief features of blockchain is top-notch security. All the transactions within the blockchain network are encrypted, thereby adding an extra layer of security. In blockchain, each and every data component has a unique identity. The blocks within blockchain networks have a unique hash. Because of this feature, blockchain in cryptocurrency plays a strategic role. It enhances the level of security for individuals who engage in transactions in the crypto universe.

Certified blockchain security expert

  • Unanimity 

In blockchain, high emphasis is placed on consensus and agreement by all the people involved. Before the inclusion of participants within the blockchain network, they need to agree to the validity of the records. To successfully add a block to the network, a majority vote is essential. Without majority voting, it is not possible to add a block to the blockchain network. Due to the feature relating to unanimity, the consent of the majority of nodes is essential to make any kind of changes. 

Leveraging Blockchain technology in Crypto setting 

The core features of blockchain technology make it highly relevant and useful in the crypto setting. In fact, the emergence of cryptocurrencies has brought blockchain into immense prominence. Cryptocurrency and blockchain technology work together, and they facilitate value transfer in the online setting. Moreover, there is no need to depend on an intermediary such as a financial institution or a credit card firm. In the absence of their presence, it is possible for the participants of the network to engage in fast and transparent transactions.

In order to answer the question – How does blockchain work in cryptocurrency? You need to take into account its core attributes. Unlike conventional banks and financial institutions, the crypto blockchain does not have to be maintained by an organization. The lack of any kind of centralization makes it highly flexible and efficient. The existence of a massive peer-to-peer network of computer systems ensures its security. Well-known cryptocurrencies such as Bitcoin make use of blockchain to process and record transactions safely.

Cryptocurrency and blockchain technology complement each other perfectly. The highly secure nature of blockchain technology makes transactions in the crypto setting safe and reliable. Furthermore, the immutability and distributed dimension make it impossible for cybercriminals or online attackers to break into the networks. The use of blockchain in cryptocurrency is fundamental to maximize value for currency holders.

Excited to learn the basics of cryptocurrency and the ways in which blockchain technology empowers cryptocurrencies, Enroll now in the Cryptocurrency Fundamentals Course

How does blockchain add value to cryptocurrency?

Now that you have a solid understanding of blockchain, you need to explore how the technology creates value in the crypto space. 

  • Smart Contracts

While discussing innovative concepts like crypto and blockchain, it is necessary to learn about smart contracts. Smart contracts are also known as self-executing contracts. This is because their terms of agreement are already written in the code. In the crypto domain, especially the Ethereum ecosystem, the role of blockchain is key while using smart contracts.

By leveraging blockchain technology, it is possible to extract maximum potential from smart contracts. These contracts help automate diverse processes and operations. That’s not all! They facilitate varying operations such as borrowing, lending, and trading without relying on any external party. 

Curious to understand the complete smart contract development lifecycle? Enroll now in the Smart Contracts Development Course

  • Seamless cross-border transactions 

In the globalized era, the number of cross-border transactions has increased substantially. The emergence of technologies such as crypto and blockchain has undoubtedly been a boon. By using cryptocurrencies, you can effortlessly engage in cross-border transactions in a flexible and efficient manner. Moreover, you do not have to rely on traditional banks, which can slow down the process and increase the costs of such transactions.

Cryptocurrencies act as the perfect tool to support cost-effective and efficient cross-border transactions. As it eliminates the need to convert currency in the global cryptocurrency setting, it definitely adds immense value for users.  You can take advantage of the innovative payment medium because it facilitates international financial and trade operations. 

  • High innovation 

In the technology-driven era, contentious innovation is a must in every sphere of life. The integration of blockchain technology in cryptocurrency helps by fostering an innovative and creative environment. Currently, many participants in the crypto and blockchain landscapes have been working on developing new projects, applications, and tokens. Blockchain technology serves as a catalyst and creates new opportunities to expand the capabilities of the crypto setting.

The features, characteristics, and capabilities of blockchain make it highly relevant in cryptocurrencies. It is an understatement to say that blockchain acts as the bedrock of the cryptocurrency ecosystem. Both cryptocurrency and blockchain have been playing a key role in revolutionizing the financial and payment system in the contemporary era. If you are passionate about the crypto universe and want to grasp the concept of cryptocurrency, it is a must to understand the role of blockchain. 

Start your learning journey with top learning resources and develop the most in-demand skills in Blockchain, Web3, and other advanced technologies with Blockchain Skill Paths.


In the cryptocurrency domain, the role of blockchain technology is of utmost importance. The integration of blockchain in the crypto space has created opportunities for individuals and businesses to use new ways of engaging in financial transactions.  In cryptocurrency, the application of blockchain technology ensures high security, transparency, innovation, and decentralization

Before understanding the role of blockchain in cryptocurrency, it is instrumental to have clarity on its key features. Some of the main features of blockchain that make it important in cryptocurrency are its immutable nature, distributed ledger, absence of an intermediary, high degree of security, and unanimity.

Currently, blockchain technology is strategically used in crypto settings for diverse purposes. Some of the chief ways in which blockchain adds value include the development of smart contracts, the facilitation of seamless cross-border transactions, and the support of high innovation. 

As the cryptocurrency environment is undergoing rapid change and advancement, the role of blockchain may further increase. The current role of blockchain has shown that it has immense potential and promise. Due to its features, its application has increased in diverse areas within a short span of time. However, cryptocurrency is one of the main areas where the presence of blockchain is immense.

Unlock your career with 101 Blockchains' Learning Programs

*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!