It seems everyone is talking about cryptocurrencies these days. Whether it’s on the news, or on social media, or anywhere else, all you keep hearing about is Bitcoin’s massive price surges and growth margins!
It is true that cryptocurrencies like Bitcoin have registered strong performances and outshone every other investment in the last year or so. Why and how this has taken place warrants a different article. However, one of the core factors has been because the technology powering Bitcoin holds a lot of promise.
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Blockchain Technology is the underlying network on which Bitcoin transactions work. Transactions and their records are done and maintained on a digital network framework called Blockchain.
In this article, we will try to simplify Blockchain Technology to people who are not software geeks or tech nerds. In other words, you can consider this article, as a beginner’s guide to blockchain technology for normal average human beings.
Blockchain Technology: What does it mean?
The first and most important thing you need to know about Blockchain is that it is different from Bitcoins. In other words, it can be used and applied as a standalone piece of tech and find applications in several different industries.
In terms of Bitcoins, it is used to store, process, and initiate financial transactions. However, it can do the same for any kind of other digital assets. Industries like health, legal, education, logistics are all experimenting with the same.
The principal attraction of Blockchain lies in the fact that the network is completely decentralized. In other words, it works without anyone’s authority overseeing or regulating the process like a bank or an international organization.
Blockchain has been referred to as a digital ledger and stores data for each and every crypto transaction on a network. This network has also been famously referred to as a ‘Block’.
How does Blockchain Technology work?
In the last section, we mentioned how no one individual or authority overlooks the entire process of a Blockchain. How then does the system emerge as being genuine and trustworthy?
The Blockchain network guarantees that all the concerned individuals and their computer systems in the network are themselves responsible for every transaction.
The computer systems are referred to as ‘Nodes’ and are interconnected to the entire network. Every transaction, which is made can be seen by everyone on the network. The transaction stored data means that no one in an isolated capacity can make changes or manipulate the same in any way.
This ensures that the system is credible, boasts of integrity, and cannot be tampered with. Rather than hand over the jurisdiction to someone else, users themselves have to self-govern the network.
A single transaction leads to the creation of a block. This then stores the entire transaction history of that Bitcoin. This eliminates any chances of the crypto being copied, replicated, or used in a fraudulent manner.
What Problems does Blockchain Technology help in addressing and solving?
Ask dailyinfographic.com credible trading website about how they maintain data and transaction records and they will point to the many issues, problems, and errors they face. For financial companies, keeping a record of all the transactions has been a pain.
This is why more than 15% of all big banks in the world are engaging with Blockchain technology and are at a pretty advanced stage of adoption.
Digital assets have always suffered from a credibility crisis. Copying, forgery, and tampering have been common grouses when it has come to questions of maintaining integrity and transparency. However, Blockchain technology helps in addressing almost all the concerns.
By creating a rather public process, where everyone knows about every single detail, they have virtually eliminated the issues altogether.
According to experts, industries like medicine, insurance, and legal where specific intricacies, case histories, payouts, and genuineness are at question can benefit greatly from Blockchain adoption.
The Bottom Line
The varied applications of Blockchain could have helped us during the pandemic. With the world requiring protective equipment, sanitizers, and now vaccines for billions, the blockchain network could have been invaluable in setting up distribution networks, maintaining records and transaction histories.
As a technology, Blockchain is just about getting started. In the next decade, it is sure to eclipse every major sector and industry with its presence and potential.