What is blockchain?
Blockchain is a financial ledger of all the recorder transactions configured to be stored by a system. These records, or “blocks” in the chain,” are all interconnected and secured, and every block has a link to its content, which is usually data about the transaction, and a timestamp.
These blocks are incorruptible, which means that they cannot be modified. This development makes blockchain the perfect way to perform essential transactions on various fields and fronts because the system can record an interchange and store it to serve as “proof.” It is verifiable.
It is a system that can allow transactions, store their records and the moment they were made, and support some of the most popular and widely used digital wallets. It is the world’s leading platform for digital assets.
Nodes form the blockchain. These are the computers connected to the network and engaging in activities. To put it in a better way, they use a client that validates transactions, thus getting a copy of it.
Blockchain is quickly finding its way into today’s business world, including banking, land, commerce, and many other applications. It is said to be the future of digital assets and online transactions, and for a good reason.
What is mining?
A miner gets his tools and implements and starts banging on the surface of the mineral, or element, with the intention of collecting it for further processing and commercializing. It is an activity that is done little by little, with patience and determination.
Digital or bitcoin “mining” is the process in which the blocks continually feed the blockchain, a better and more appropriate way to identify the record of past transactions in a specific currency system. But how are bitcoins added to the record?
To “mine” successfully, a person needs to gather transaction records or blocks and try to solve a computed puzzle. If achieved, the miner will get bitcoin as a reward and will claim the right of putting another “brick” in the chain.
What is a cryptocurrency?
A cryptocurrency is a digital currency system that uses cryptography, making it more secure, durable, and resistant. It is not tangible, but usually has a significant amount of value in comparison with dollars, euros, pounds, and some of the most reliable physical currencies in the world.
Bitcoin is the most famous cryptocurrency, with nearly 15 million bitcoin circulating in the digital world. This cryptocurrency is incredibly valuable, with those 15 million accounting for almost 3.4 billion dollars in market value.
Other cryptocurrencies besides Bitcoin include PPCoin, Litecoin, and Namecoin. Many of them use blockchain as a way to record transactions.
It is convenient to clarify that blockchain is not the same as Bitcoin. Bitcoin is the cryptocurrency and blockchain, in this case, would be the digital wallet that helps make the whole process transparent and lasting in time.
Bitcoin, and blockchain for that matter, are decentralized assets, which means that no government or political affiliation in the world can have a say on what happens in transactions. No one can control them or any cryptocurrency.
Blockchain and banking
Imagine the possibilities for multinational financial enterprises if they implement blockchain as their way to do business: they can save millions of dollars on labor and infrastructure if they work to develop and maintain a virtual platform to engage and record all of their financial transactions.
The number of banks and financial institutions embracing blockchain as their go-to financial registry is growing by the day. Banks invested more than one billion dollars in researching and developing of a safe transactions network just as blockchain in the last three years.
Worldwide banking institutions such as UBS, Deutsche Bank, Santander, and the Bank of New York Mellon are actively engaged in this method and have even created digital currencies; which by the way have experienced enormous growth in popularity. The number of cryptocurrencies around the world now reaches 700.
Blockchain and business
Business transactions will be safer and more transparent if there is a way to record the participation of all parties and to store a copy of the transaction details. It has enormous potential in reducing possible frauds or illegal activity.
Because of its many advantages and benefits, more businesses and companies are investigating blockchain and making it part of their daily operations. Estonia, for example, is working to establish a vast network of medical information, clinics, and doctor’s information with the idea of building a nation-wide database in the sector.
European countries such as the Netherlands are also experimenting with this marvelous technology. Stores, online shopping, and many other fields of the economy are engaging in activities with blockchain, promoting the use of smart contracts.
A smart contract is a digital instrument, in the form of a computer protocol, which facilitates the use of an agreement between two or more parties.
The future of blockchain
The future looks bright for blockchain-like networks and systems. The phrase “the future is now” has never been used more appropriately, since many banks and business ventures have already begun engaging in transactions with cryptocurrencies and using blockchain as their way to put their fingerprints on them.
However, there are still several hurdles that developers, miners, banks, and businesses have to deal with. For example, a considerable part of the planet is not familiarized with the concepts of cryptocurrency, digital assets, digital fingerprints, and digital wallets.
Also, labor problems are likely to arise because blockchain can surely perform some of the tasks related to bankers, auditors, customer service, and others. In spite of all its advantages, an innovative measure is not necessarily easy to implement.
The other clear inconvenience that may arise from the use and massive implementation of cryptocurrency and blockchain is coming up with the right regulations. This is a problem because some countries are already actively opposing the use of cryptocurrencies.
As the world shifts from manually performed activities to a digital-based operation center, many of the hurdles can be mitigated or eliminated eventually. But time, the most precious and irreplaceable of resources, maybe an issue because the process can take a while.
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