Blockchain in Cryptocurrency: Beginner Guide and Career Outlook

Since digital currencies and blockchain technologies are developing rapidly, professionals with knowledge of blockchain are in high demand. Applying this expertise to different areas can help you unlock opportunities in your current role or start a fast-paced career working with decentralized finance (DeFi) technologies. In the following article, you'll learn what blockchain is and how it relates to cryptocurrency.

Looking for a comprehensive introduction to blockchain and cryptocurrency? Consider enrolling in the beginner-friendly, 17-hour online course, Blockchain, Cryptoassets, and Decentralized Finance. By the end, you'll understand how blockchain disrupts eight of the core functions of traditional financial services and be able to describe seven different types of crypto assets.

What is blockchain technology?

Understanding the blockchain is fundamental to understanding cryptocurrency exchange. Blockchain technology records and confirms cryptocurrency trades, like a digital ledger. It collects and stores information about buying, selling, or exchanging digital assets. This information exists without a central authority (such as a bank) overseeing or controlling the cryptocurrency market. Many professionals consider crypto assets a “global currency” because they hold the same value worldwide.

Blockchain in cryptocurrency 

Bitcoin, Ethereum, and other wide-scale cryptocurrency coins use blockchain to process and record transactions securely. This remains the primary use of the technology. However, it is making its way into projects outside of cryptocurrency. Understanding how these blocks are coded and how different industries may benefit from this application can help you market yourself to new roles in this field.

How blockchain works: key terms to know

With blockchain technology, each transaction or piece of data is stored as a “block.” You then add this block to the existing chain of blocks to create a chronological picture of all activity. The blockchain is designed to be a secure and transparent technology, so each block is immutable or, unchangeable and viewable by everyone. As the uses of blockchain technology continue to expand beyond virtual currencies, familiarizing yourself with key terms can be helpful whether or not you work in the field.

• Blocks: As the name suggests, Blockchain is a chain of blocks. Each time a transaction occurs, the data becomes a new block. This block has a cryptographic hash that links it to the most recent block, a notation of the time, and a record of transaction information. The blocks link in chronological order and can record each new block on devices worldwide rather than on one or two devices. This ensures accurate, transparent, and permanent records. 

• Mining: Mining describes the process of updating the blockchain by adding blocks and creating new coins. Miners validate the transactions, which requires them to solve cryptographic hash puzzles. Once miners validate your transaction, you can add the block to the blockchain ledger and update records. This type of validation requires high-level computing power and advanced equipment. Those pursuing a career in mining often invest in this type of equipment and receive Bitcoins or other cryptocurrencies as payment for mining efforts.

• Nodes: A node in blockchain technology is a computer that runs blockchain software and has access to the blockchain. The network of nodes in the blockchain is all the computers that run the database. Every node updates with the latest version of the blockchain, so there is a decentralized record of all transactions. 

Read more: Cryptocurrency Explained: Definitions, Skills, and Opportunities

Use of blockchain in cryptocurrency

Currently, crypto exchanges are the most common use case for blockchain technology. Bitcoin, Ethereum, and other popular cryptocurrency coins use blockchain to process and record transactions securely. This technology makes it possible to ensure transparency and protect the financial information and identity of crypto buyers and sellers.

Blockchain applications beyond cryptocurrency

The success of blockchains for currencies has opened the door to many expansion opportunities. The technology can increase connectivity and transparency between organizations and streamline processes.

Examples

For example, using smart contracts can simplify transactions and business payments. These smart contracts set up a list of conditions to be met and code the payment to be released once users meet the conditions. Blockchain technology can provide templates for these contracts and simplify payments since they don't need intermediaries.

Payment processing and financial transactions

The use of blockchain in the financial industry has the opportunity to make transactions more efficient. It may streamline international and domestic transactions, reduce transaction fees, and increase transparency. Visa has shown the efficacy and potential of blockchain technology for mainstream use since adopting blockchain for international business payments in 2017 [1].

Recording property records and real estate transactions

Blockchain technology can record the transaction records for property in a transparent, widely available, and secure way. This allows the public access to an indisputable record of property ownership and makes these records more easily available than following a paper trail. When it's time to sell, verifying and transferring ownership can be done more efficiently.

Securing patient information

Inefficient hospital record-keeping and lack of security have caused problems for providers and patients. Blockchain technology has the potential to secure patient data, track outbreaks of diseases, and create more accessible hubs of medical information. Instead of tracking data across all locations, patients and providers can access all the information in a decentralized database.

Streamlining the supply chain

Blockchain technology offers two key benefits to supply chain functions: improved data security and communication. Manufacturers, shippers, and customers have access to the most up-to-date information about the shipping process. Not only does this keep everyone in the loop, it can also improve coordination between supply chain partners and reduce execution errors.

Tracking voting records

The immutable nature of blockchain makes it appealing to election officials who want to increase public confidence in election results. Blockchain technology could promote transparency in election results and securely store records of all votes. Not only does it create a permanent register of votes, but it can reduce the possibility of voter fraud since each ballot corresponds to a single ID.

What are some advantages of blockchains?

Many industries are seeing the advantages of blockchain for storing, recording, and securing their data, such as global access and increased privacy. While specific advantages and disadvantages of blockchain uses will differ by industry, common advantages include the following:

• Anonymity: Blockchain technology allows you to create transactions under pseudonyms without being attached to your identity. While the record is available publicly, the identities of the people making them often are not.

• Cost: Blockchain technology can potentially reduce the cost of international transactions. This comes from lower transaction fees, reduced need for an intermediary, and automated smart contracts to streamline transactions.

• Decentralization: Blockchain's decentralized nature means records remain consistent across locations and countries. This diminishes discrepancies in data and ensures professionals have access to the same information.

• Increased privacy: Blockchain encrypts data and uses a system that prevents data corruption. Private key authentication is used to protect data, so network administrators only have access to an overview of the data and not user-specific information.

• Permanent records: Each data block has a cryptographic signature that validates that the information has not been tampered with. Because blockchain information exists across many devices, the data record stays forever. This takes away debate about the validity of the records.

• Security: Blockchains are not kept in a centralized location, so hackers cannot disrupt or corrupt the data. The blockchain is continually updated to nodes worldwide and provides an indisputable record of data and transactions.

• Streamlined processes: Blockchain technology can provide templates for smart contracts, making it easier for businesses to set up transparent, efficient, and secure business deals. Smart contracts with blockchain reduce the steps to complete a transaction and process payments quickly.

Career opportunities in blockchain

Because blockchain is a new concept, many careers in this industry are still emerging. It’s an exciting time to build skills in this area, as you never know what potential opportunities are around the corner. Common professional opportunities in blockchain technology include development and consulting jobs.

Blockchain developer

Average annual base salary (US): $143,509 [2]

Blockchain developers use blockchain technology to develop applications for organizations, including dApps and smart contracts. Sometimes, you may focus on creating protocols and architecture and maintaining and improving them over time. You also can design software that operates on this architecture.

Blockchain legal consultant

Average annual base salary (US): $73,739 [3]

As a blockchain legal consultant, you would help companies navigate blockchain implementation. This can include finding the best practices to protect information and privacy while maintaining transparency. You may also be asked to help companies comply with US regulations and abroad.

Blockchain project manager

Average annual base salary (US): $158,792 [4]

Blockchain project managers build teams of blockchain experts to work on blockchain-related projects. In this role, you are responsible for tracking deadlines, solving problems, and communicating between experts and customers to ensure the project meets the customer's needs. Although this is a relatively non-technical role, understanding blockchain technology can be useful.

Blockchain quality engineer

Average annual base salary (US): $128,045 [5]

Blockchain quality engineering positions are similar in their responsibilities to other software quality engineers, except the focus is on validating the use of blockchain technologies. When a company or industry designs a new blockchain environment for a specific process, your role would be to test and validate that the project is ready to be used publicly. 

Blockchain architect

Average annual base salary (US): $182,025 [6]

Blockchain solutions architects work with research and design teams to design platforms and solutions that address problems. You also have opportunities to look for ways to improve the current system, identify risks, and maintain operational efficiency. Understanding blockchain and business operations can contribute to your success in this role.

Blockchain Web/UX designer

Average annual base salary (US):  $112,634 [7]

As a UX designer, you will create and maintain the application's user interface. Companies creating new blockchain solutions need user interfaces that are easily accessible and convenient for customers to use. This can help facilitate the wide-scale adoption of this technology.

Qualifications and degrees for blockchain careers

The qualifications and degrees needed for a career in blockchain technology vary by profession. For example, a blockchain UX designer may showcase their experience with UX design in previous projects and demonstrate how these skills can be transferred to UX design in the blockchain space. A blockchain project manager may want to show proven success managing technical teams and why they would be the right fit to lead a project team in this area.

A degree in computer science or a related field can demonstrate working knowledge in the technical field. In any position related to blockchain technology, showing an in-depth knowledge of how blockchain technology works can help you stand out to employers and validate your knowledge and skills. 

Top technical skills for a career in blockchain

Many blockchain professions are relatively new, so finding people with direct experience in blockchain technology can be rare. For this reason, showing your knowledge of this area and technical skills related to the position can help you stand out from other applicants. You may consider building the following skills:

• Computer science

• Cryptography

• Cybersecurity

• Data science

• Data structures

• Programming languages

• Smart contracts

Looking to build a career in blockchain?

Ready to take the next step toward a blockchain technology career? Take an introductory course on Coursera to start building your knowledge base and find the right fit for you. As opportunities in blockchain technology continue to grow, you can develop skills that align with the industry.

Taking a course like Blockchain: Foundations and Use Cases by ConsenSys Academy can help you build your portfolio and expand your skill set.