In the digital world, blockchain technology is the topic of the hour as of late. This is due to its association with Bitcoin, the cryptocurrency that shocked the planet, as one unit of Bitcoin surged to as much as $15,000 to $19,000 in value.
As a technology, blockchain goes beyond Bitcoin trading or transfer of digital currencies like NOAHCOIN. There are other applications of blockchain technology in various industries, including some of the most popular ones like e-commerce and finance.
There’s also the possibility that other blockchain-enabled activities would go full blast—from electronic voting to discovery of musical artists and streaming of music.
With these endless possibilities, one could expect that blockchain will continue to disrupt practically everything in the online space.
This infographic answers some of your most common questions to help you better understand and appreciate the concept of the blockchain technology.
What is blockchain technology?
Blockchain technology is a system of storing blocks of information about digital transactions in a database called the blockchain.
A blockchain may either be public or private. The first one shows the history of records across the blockchain network and allows anyone to join the network.
On the other hand, a private blockchain has more restrictions. Only selected parties can access data or transact in the blockchain, which makes it more suitable for corporate use.
How does blockchain work then?
Suppose you’re a Bitcoin user who wants to purchase a product or service. Once you push with the transaction, all the details about it – who initiated the transaction, who supplied the deliverables, and the transaction date with a timestamp – are recorded in a block.
Anyone on the network will see that you’re trying to make a transaction, and each one of them will need to validate and approve the transaction. Specifically, members of the network will need to validate if the Bitcoin has not been re-used.
Once approved, the block will be added to a chain containing similar previous transactions. This block cannot be removed or altered from the chain, resulting in a permanent record of transactions.
What do experts say about blockchain?
“Because of Bitcoin young women in Afghanistan are able to write blogs and do social media and video production. In exchange for this work, they are paid in Bitcoin.” – Bitcoin Magazine
In 2008, blockchain was originally invented and designed for use in the cryptocurrency world, particularly Bitcoin.
Since then, it has become an alternative for businesses to transfer money to employees and freelancers without incurring service fees or delays. This is because transactions in the blockchain system are processed directly between parties in the network without the need for a bank or other online transfer services to verify the transaction.
“Blockchain truly is a mechanism to bring everyone to the highest degree of accountability.” – Ian Khan, TEDx Speaker/Author/Technology Futurist
Blockchain technology has revolutionized the way that people do business on the internet. With blockchain, the integrity of online transactions or activities is maintained since the entire network must give the go-signal to complete the transaction.
Plus, it helps to reduce both errors and fraudulent schemes since anyone can view the ledger of transactions. Any inconsistencies, redundancies, or illegalities can be flagged.
How well is the blockchain market growing?
The growth of blockchain technology is phenomenal. From the Bitcoin framework, the technology has expanded to hundreds of applications, showing that blockchain is not exclusive for financial transactions.
On the contrary, it can work for any industry that relies on data and records management including health care, taxation, legal, insurance, and social service to name a few.
Even banks are considering the use of blockchain to help them speed up their processes so that they could keep up with how blockchain transactions are done with lightning speed.
With everyone looking to adopt the technology, it won’t be long before the blockchain market becomes a major force in the global economy.
What are the pros of blockchain?
Blockchain provides a decentralized platform where people can exchange anything with value – money, goods, services, or property – without the need for an intermediary or third party to facilitate the transaction.
Because of this, costs for third-party services are reduced. It also cuts the time it takes to complete the transaction since there’s one less channel to go through.
This decentralization is also helpful in preserving the privacy of users who have complete control over their personal information and their transactions.
In terms of security features, blockchain uses advanced cryptography to protect the integrity of the entire database. Hackers and cybercriminals will find it difficult to break into a block since they will need to bypass the rest of the blocks in the chain.
When it comes to use and applications, any entity that has access to the internet can apply the blockchain technology. Although blockchain originated with a financial model in the form of Bitcoin, its traceability and visibility features, along with its ability to store and manage data, make it ideal for contract signing, casting votes, proving copyright ownership, and much more.
What are the cons of blockchain?
Blockchain is only about a decade old. It’s a new technology that still needs to be perfected over time. For instance, there are contentions that blockchains are not suited to hold large amounts of data or back up data. This issue on data storage could affect the performance speed and security of the blockchain network.
Another concern among blockchain users is that legal issues are inevitable in any business venture. Since blockchains operate without regulation from governments, not all organizations might be welcoming to the idea of using the technology in their system. From a business perspective, the lack of clear regulation status means the business is not protected from liabilities.
Blockchain technology can also be costly. A lot of electric power is used up across blockchains, so businesses planning to adopt the technology must be prepared with huge operational costs.
It may take a while for everyone to understand blockchain fully. Hopefully, this post has given you a good head start in understanding how this new, promising technology works in the world of digital currencies and beyond.