Understanding Blockchain Technology
Although many people now understand what cryptocurrency is, they may not know about the technology required to operate such a decentralized financial market. No matter if it's Bitcoin, Ethereum, or Ripple, all cryptocurrencies need blockchain technology to exist. For this article, I'm going to provide clear insight into what blockchain is.
What Exactly is a Blockchain?
he blockchain exists for numerous reasons, including; additional security, global access, decentralization, transparency in the financial market, and more. Furthermore, the blockchain tracks all transactions coming in and going out. One of the critical characteristics that individuals enjoy the most is that it's decentralized, and there is no central authority like the usual banking system. To understand in more detail, a blockchain consists of individual blocks which hold a certain amount of transaction information that is publicly viewable.
Instead of a central bank authority, the blockchain is secured and operated by an extensive peer-to-peer network. Moreover, the crypto network is what gives each user their own wallet address to send and receive cryptocurrency. When you want to trade or spend your cryptocurrency, it requires the private key that comes with your wallet address.
The creator, Satoshi Nakamoto, wanted to make online transactions more efficient, safer, and accessible on a worldwide scale. So, to handle all of the transaction information and where money was being sent, the blockchain was created to keep track of this. In addition, the decentralized nature of the blockchain can heavily mitigate fraud as every single transaction can be viewed and tracked publicly.
The Future of Financial Technology
Although blockchain technology was created for a handful of reasons, it has blossomed into a heavily adaptable technology. Moreover, it is capable of hosting a massive range of applications with a plethora of different uses. There is a never-ending list of use cases for the blockchain from educational technology, digital real estate, news, and video games. In addition, it's essential to understand that there are and can be multiple blockchains such as the Bitcoin or Ethereum blockchain and so on.
You might be able to understand now why governments all over the world are trying to get a grasp on cryptocurrency and blockchain technology, as this is the first thing that’s successfully disrupted our current financial system as a whole. Furthermore, blockchain technology has a way of blending in with real-world applications and industries, making its list of use cases nearly endless.
Right now, governments across the globe are trying to impose as many regulations as possible on their citizens. They realized they wouldn't be able to defeat the blockchain, so, as usual, they're going to monitor everything they can. In some cases, certain governments are ready to ditch fiat currency altogether. Many cryptocurrency investors have varying worries about new laws and regulations, but the decentralized nature of the blockchain will remain, as once again, no central authority controls it.
If anything, you should understand that blockchain technology is here to stay and will continue to evolve. Every day people will continue to benefit from the multitudes of applications and services that can be built on blockchain technology. Implementing the same security requires transparency and value, no matter the application.