What Is Blockchain And Cryptocurrency?
The world is changing and it starts with the invention of blockchain technology.
Numerous institutions, companies, and investors are starting to look into this technology and it has gained similar stature to the Internet when it was in its earlier stages. However, what is this technology all about and how does it relate to the use of cryptocurrencies?
Here are the details on blockchain and cryptocurrency solutions along with their advantages.
What is Blockchain Technology?
To understand blockchain technology, it’s important to piece things together and start back in the 20th century. The first attempt at something similar to blockchain technology was by a man named Ralph Merkle (1970s) when he attempted to create a simple P2P network (peer-to-peer). All of the computers were set up as a network, which would use built-in data structures to handle/verify data between themselves. The idea of verifying the data was to make sure both sides would say the same thing about a particular transfer. This meant nothing could be altered on one side without the other knowing.
By 2008, Satoshi Nakamoto kicked things up a notch in the form of what is now known as a distributed blockchain. This meant a P2P network would be set up with various connecting points (i.e. networks) across the world with each being able to verify transfers similar to what was designed by Ralph Markle. This is how blockchain technology was born as it made sure everything could be run without needing a central authority figure.
Along with how it was set up, it’s also important to know how it works.
In general, the idea of blockchain technology is to manage data exchanges on a digital ledger. This is where a transaction is recorded and verified after it has been completed. It can only go through when both sides have verified the block. All of the nodes are interconnected meaning the verification cannot be done by one party. As soon as it is verified, it is automatically put on the ledger and cannot be played around with or changed.
To make sure everything goes ahead properly with blockchain technology, each account or address is given a private key. This is used to sign into the account and access information or cryptocurrencies depending on what is present. Each account is also given a public key, which is similar to an email address given out to people.
What is a Cryptocurrency?
In general, a cryptocurrency is a form of digital currency and is designed with the use of cryptography (encryption technique). The first cryptocurrency to be launched was made by Satoshi Nakamoto in 2009 as a virtual solution after the banking crisis.
Block chain Benefits
1) Can’t Be Counterfeited
It’s important to note, the main issue people used to have with cash was counterfeiting. No one likes being handed illegal bills but that can happen depending on where you live. It is best to make sure you are not dealing with such deception and avoid counterfeit bills at all costs.
2) Easier to Track
You will want to make sure things are easier to track and that is what this technology is able to offer. With blockchain and cryptocurrency technology, people are able to track where funds are going and how information is moving from one place to another.
3) Easily Accessible
You are going to have something that is easily accessible, which is important when it comes to your coins/tokens or even general data. It should be readily available and easy to use if that is what you choose to do. This technology allows you to do this without hesitation.
4) Reduced Fees Per Transaction
With blockchain and cryptocurrency technology, you are going to see a reduction in fees. A lot of financial transactions come along with massive network fees that are rough on the bottom line. No one wants to be in this sort of situation but it is often accepted as a cost of doing business. With buying cryptocurrency the fees are reduced by a significant margin. Coins like cardano and monero to name a few
In the end, this is a big part of the future and is starting to become a major aspect of modern banking and finance. Over time, it will grow even larger.