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Key Takeaways

Cryptocurrency transactions are recorded on a public ledger (the blockchain), which makes all transactions clear and permanent.

These transactions are checked and approved by many computers across the network using methods like Proof of Work (PoW) and Proof of Stake (PoS).

Proof of Work relies on miners to solve difficult math problems to confirm transactions in a resource-intensive process.

Proof of Stake relies on validators to confirm transactions by locking up (staking) their coins, making it more energy-friendly.

These consensus mechanisms are very important in decentralized networks. They help prevent fraud and double-spending, and eliminate the need for centralized authorities.

Introduction

Bitcoin and most other cryptocurrencies work differently from traditional money because they don't rely on banks or central authorities to check and approve transactions. Instead, the verifications are done through a public ledger, the blockchain.

You can think of blockchain as a giant public notebook that everyone can see, but no one can change without a broad consensus. But how does the system make sure that all transactions are correct and no one cheats? 

This article explains how crypto transactions are checked and verified by the network using consensus mechanisms like Proof of Work and Proof of Stake.

What Is a Cryptocurrency Transaction?

When you send cryptocurrency to someone, you create a transaction. This transaction shows who is sending the coins, who is receiving them, how many coins are being sent, and the time the transaction happened. As soon as you send it, the transaction is shared with everyone on the blockchain network so it can be checked and confirmed.

How Are Blockchain Transactions Verified?

Sharing and checking

When you create a transaction, you are effectively using your wallet keys to generate a digital signature. Then, your transaction data and signature are sent to the decentralized network of computers (nodes). These nodes check if you really own the coins and if the details are correct. When the transaction passes these checks, it’s grouped with other transactions to form a block, which waits to be approved by the network.

How the network agrees

The entire blockchain network must agree that the new block is valid before finally confirming it. This agreement is reached through the consensus mechanisms we mentioned. The two main ones are Proof of Work and Proof of Stake.

Proof of Work (PoW)

In Proof of Work, miners compete to solve complex “math puzzles”. The first miner to solve the problem gets to add the new block of transactions to the blockchain. Other miners and validating nodes then check and agree on the solution. When the block is accepted, the winning miner earns a reward in cryptocurrency (the block reward). This is the method used by Bitcoin. It keeps the network very secure, but uses a lot of energy and computer power.

Proof of Stake (PoS)

Proof of Stake works differently. Instead of solving puzzles, validators are chosen based on how many coins they have locked up (staked) in the network. Validators take turns proposing and confirming new blocks. If a validator tries to cheat, they could lose their staked coins (known as slashing). PoS is more energy-efficient and is used by many blockchain projects, including Ethereum, BNB Chain, and Solana.

Why Does Verification Matter?

Historically, there were two major challenges that hindered the development of digital currencies:

Double-spending: a previously common issue in digital cash systems, where the same funds could be sent to two or more recipients.

Trust in a central authority: People had to trust banks, companies, or other centralized authorities to handle and approve transactions.

The blockchain solves these problems because every transaction is recorded openly and permanently, so you can’t spend the same crypto twice. There is also no single company or bank in control. Instead, thousands of computers work together to check transactions, making the system highly resistant to attacks and fraud.

What Is a Blockchain Confirmation?

A confirmation happens every time a new block is added to the blockchain. The more confirmations a transaction has, the more secure it becomes. This means it’s harder for someone to change or cancel it.

Different blockchains need different numbers of confirmations before a transaction is considered safe. For example, merchants that accept Bitcoin payments usually wait for at least 4 confirmations before releasing their products, while Ethereum payments often require at least 30 confirmations.

Closing Thoughts

The way cryptocurrency transactions are verified is what makes digital money safe and trustworthy without banks. Whether through the complex math puzzles in Proof of Work or the coin-staking system in Proof of Stake, these methods protect the network and solve big problems like double-spending and centralized control. By understanding how transaction verification works, you can better appreciate the technology behind cryptocurrencies and why many people around the world feel confident using them.

Further Reading

What Is Blockchain and How Does It Work?

What Is Cryptocurrency Mining and How Does It Work?

What Happens After All Bitcoins Are Mined?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Walrus is a decentralized storage and data availability protocol designed for blockchain applications and autonomous agents.

The protocol provides a cost-effective, composable storage layer for large, unstructured data, such as media files, AI datasets, and blockchain archives.

Walrus uses an innovative erasure-coding algorithm called Red Stuff, achieving fast recovery with minimal replication overhead.

Walrus Sites demonstrate how developers can host fully decentralized web experiences directly on Sui and Walrus, without relying on centralized infrastructure.

What Is Walrus?

Walrus is a decentralized storage and data availability network designed for blockchain and AI-driven applications. The protocol provides a scalable, verifiable way to store large files, such as images, videos, and datasets, that would otherwise be costly and inefficient to store directly on-chain.

Walrus is built on the Sui blockchain, and the platform integrates with Sui’s smart contract environment to offer developers flexible, reliable storage capabilities. Originally developed by Mysten Labs, Walrus is an independent decentralized network governed by its native token, WAL, and supported by the Walrus Foundation.

How Walrus Works

Encoding and off-chain storage 

When data is uploaded to Walrus, it is split into smaller pieces, known as slivers, using Red Stuff, the network’s custom erasure-coding algorithm. Red Stuff improves efficiency by distributing these encoded fragments across multiple storage nodes rather than storing complete copies on each one.

These storage nodes are periodically required to verify that they still hold their assigned fragments, helping to maintain ongoing availability. Even if several nodes go offline, the original data can be rebuilt from a subset of slivers. This approach allows Walrus to maintain resilience with fewer data copies than the full replication typically required in traditional blockchains.

On-chain metadata 

In Walrus, large files are stored as blobs, which refer to bundles of unstructured data such as images, videos, or datasets. Instead of placing these large blobs directly on the blockchain, Walrus stores only their metadata and proofs of availability on the Sui blockchain.

Proofs of availability are cryptographic records that confirm storage nodes are still holding their assigned data fragments. These proofs allow anyone to verify that a blob remains accessible without downloading or inspecting the full file.  

Developers can use Sui smart contracts, written in the Move programming language, to reference and validate these stored blobs directly within their applications.

Data retrieval 

When you request a stored file, an aggregator gathers the required slivers from multiple nodes and reconstructs the original data. The retrieved content can then be delivered through a content delivery network (CDN) or cache for faster access. Because only small fragments are transferred and recombined, the retrieval process remains efficient even for large datasets.

Walrus Sites

Walrus Sites are decentralized websites hosted directly on the Walrus and Sui networks, providing an alternative to traditional web hosting. Developers can upload static files through the site-builder tool, and the content is stored permanently on the network.

Each site is tied to a Sui address, can be associated with NFTs, and supports SuiNS for simple, human-readable names. Because the content is stored across decentralized nodes, it remains available and resistant to censorship. While Walrus Sites are static by design, developers can connect wallets and use smart contracts to add interactive features and on-chain functionality.

Use Cases

Walrus can be integrated with other blockchains to support applications that require decentralized and scalable data storage, including:

NFTs and DApps: Walrus can store and deliver media files such as images, videos, and audio. These files are accessible through HTTP requests, allowing developers to build multimedia decentralized applications (DApps).

Artificial intelligence: Walrus can be used to store verified datasets, AI model weights, and proofs of correct training, helping ensure the availability and authenticity of AI data and outputs.

Blockchain data archiving: Walrus can function as an alternative storage layer for blockchain history. For example, the network can store Sui’s checkpoints, transaction records, and historical snapshots of blockchain states.

Data availability: Walrus supports Layer 2 networks by certifying the availability of off-chain data, such as blobs, validity proofs, and zero-knowledge proofs (ZKPs), required for verification and auditing.

Decentralized web hosting: Walrus can host complete decentralized websites, allowing both front-end and back-end components to operate fully on-chain.

The WAL Token

WAL is the native token of the Walrus protocol, built on the Sui blockchain. WAL has a maximum supply of 5 billion tokens and follows a deflationary model that reduces supply through token-burning mechanisms. It’s used within the ecosystem for many purposes, including:

Payment: WAL is the payment token for data storage on Walrus. Users can pay upfront for storage, and the WAL is distributed over time to nodes and stakers as rewards.

Security: WAL supports network security through delegated staking. Users can stake or delegate tokens to storage nodes and earn rewards based on node performance. When slashing is introduced, penalties will apply to underperforming nodes.   

Governance: WAL holders can participate in network governance by voting on key parameters and penalty settings. 

Walrus (WAL) on Binance HODLer Airdrops

On October 10, 2025, Binance announced WAL as the 50th project on the Binance HODLer Airdrops. Users who subscribed their BNB to Simple Earn and/or On-Chain Yields products from October 1 to 3 were eligible to receive WAL airdrops. A total of 32.5 million WAL tokens were allocated to the program, accounting for 0.65% of the total token supply.

WAL was listed with the Seed Tag applied, allowing for trading against the USDT, USDC, BNB, FDUSD, and TRY pairs.

Closing Thoughts

Walrus combines decentralized storage with blockchain technology to provide a secure, efficient way to manage large amounts of data. Built on the Sui blockchain and supported by the Red Stuff encoding system, the network helps to lower storage costs while maintaining data availability. With features such as Walrus Sites and tokenized storage capacity, the protocol offers developers an alternative for building data-driven applications in a decentralized environment.

Further Reading

What Is Decentralized Storage?

What Is Data Tokenization and Why Is It Important?

What Is EIP-4844 in Ethereum and How Can It Benefit Users?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.