If you’ve had spent a considerable amount of time with the internet already, there’s a great chance that you’ve heard a lot about Bitcoin and Ethereum already. If you have, then it is also very likely that you’ve heard about the term “blockchain.” It is also very likely that you’ve used the technology already… though you don’t really know yet that you did.
Even if you haven’t invested in Bitcoin or other similar cryptocurrencies yet, you are most certainly owning a social media account or an email account. For that reason, there is a strong possibility that you have participated in the propagation of digital cash. In that case, you’ve already participated in the ever-expanding blockchain universe.
Blockchain can be easily defined as “a decentralized, interlinked set of data-containing blocks that anyone can view and verify.” Experts, as well as laypersons within the field, may have varying verbal definitions, but the concept can be basically explained that way.
If you have now in-depth knowledge about Bitcoin, then you might have known about the basic facts that revolve around it: that it's the most popular form of digital currency, and that many people are getting extremely wealthy with it.
Though some people view cryptocurrencies as scams, they are in fact very real, and many giant corporations are actually pouring their resources into the cryptocurrency game because, over the years, it has really proven to be a promising way of earning some great revenues.
Such a belief wouldn’t become a worldwide phenomenon if not for the existence of blockchain. It is the reason why studying the underlying factors around it is of high importance.
Brief History of Blockchain
The year was 2009 when a mysterious entity named Satoshi Nakamoto published a whitepaper about a decentralized information system in which everyone can act as a watcher and authenticator. The real identity of this visionary is still not revealed clearly even up to these times. Cryptocurrency experts seem to have this declaration that Nakamoto isn’t really a guy but a group of brilliant individuals.
The idea of a digital form of money was then born and was named Bitcoin. It was the very first of its kind, and the innovation behind it was in fact a very brilliant and clever one. With it, transactions can be done easily without the authority of banks or any major financial organization. By eliminating the need for a middleman, payments are done more efficiently online, while done in the most secure manner. But not too many people were too interested at first.
But just after 2 years, Bitcoin underwent a market explosion which resulted in a $214 billion revenue. The most notable company that contributed to such a huge financial spike was an internet firm called Silkroad – a company often associated with catering to criminally-oriented transactions. It is common knowledge that Bitcoin got its popularity first within the black market, as it has proven to be very effective in verifying transactions speedily.
But regardless of the shady initial startup phases of blockchain, it has nonetheless proven to be a very effective tool for those who want to deal with monetary transactions in the fastest, most economical, and most convenient way.
Problems that Blockchain has solved
Whenever great amounts of money are involved, there will always be a great likelihood of fraudulent acts as well. It is for this reason that blockchain technology exists, and is now one of the most constantly-developed forms of technologies to ever exist in the digital world.
Because of the fact that blockchain is decentralized and can be viewed by anyone via a public ledger, the slightest acts of tampering with the data inside it can be extremely difficult. Even the smartest of hackers armed with the most powerful supercomputers would find it really hard to do some modifications within any given blockchain.
Because there are more plain users compared to the number of skilled hackers, the very act of penetrating a blockchain successfully is next to impossible. If you’ve heard about hackers attaining millions of dollars of work of cryptocurrency, they did it by socially dealing with people directly.
By making a fool out of those people outside the halls of blockchains, many of those hackers are in fact successful in robbing great amounts of crypto-coins. There is no way a few hackers could destabilize a thriving blockchain because again, there are really a limitless number of prying eyes that are watching over them. For now, at least, blockchains are totally impervious against typical hacking attacks.
Such statements are well-established facts that make it clear that financial fraud is something that blockchain has solved so efficiently. If banks or other major institutions will only be the ones handling and processing transactions, processing could take a long time. They will be closed on weekends and holidays, and not to mention, sickly or troubled employees could delay the process even longer.
Typical transactions could take hours, days, or even weeks to truly verify. Even the simple task of verifying the person’s identity, the real source of a certain fund, or if such a fund comes from legal sources or not.
But with blockchain, such a delay isn’t really a problem since anyone can easily view and verify any transaction at all. Although data is stored in massive computer servers, such machines are scattered in various unknown locations. The exact locations of them are not relevant, what matters is the validity and authenticity of the data they’re storing.
Furthermore, anyone with a fast-enough computer can act as a node or a miner for the blockchain community to where he belongs. Such a person, often called a miner, can offer his services and be offered with crypto-rewards which he may convert into real cash, or make crypto-investments with.
How Blockchain has grown over the years
What makes the blockchains of known cryptocurrencies grow so fast is mainly due to user participation. The more participants take place with a blockchain community, the more valid and verifiable the data within it becomes. More beholding eyes, more security – that seems to be where the strength and beauty of the system stem from.
There is unparalleled ease and comfort that digital cash is giving. For instance, there is no need to print actual banknotes or mold metallic coins just to come up with money that people can spend. Instead, people can just utilize codes, numbers, and characters that represent their money and digital wallets. They can then use those digital codes to buy any commodity they want or any service they want to be rendered into them.
Furthermore, there is no need to have an actual, tangible representation of the digital money that they have. While real money needs gold, oil, diamond, or any other object to represent it, cryptocurrencies only need data verified by others to come up with a certain amount that can be spent in the real world.
In case you haven’t grasped it yet, the real value of money lies not in the actual paper bills or metallic coins, it’s actually there on the value of whatever it is that people declare as important. And within the blockchain, the corresponding monetary equivalents of those numbers are being considered valuable by the participants and for that reason, they become important.
That concept is the very reason why the cryptocurrency business is growing so rapidly. Today, even well-established banks that haven’t gone digital for many decades are now adapting to the raw power that Bitcoin and its varieties are unleashing into the field of economy.
They have to do so or they would be left out and get outdated. Not hopping into the cryptocurrency bandwagon would be a terrible idea considering that any major financially-oriented company you can think of today would be already investing in digital money.
With its existence, Bitcoin, as well as the other cryptocurrencies that came after it is now spreading into the world like wildfire, bypassing the need of dominant business entities who have been controlling the flow of money for many generations.
