Did you know that only around 8% of the money supply that we have exists in bills and coins, the rest is just imaginary numbers on a screen? The way that things are going this tendency seems to increase, which means we will get to see fewer bills and coins. Most of you have probably heard about the words bitcoin, blockchain and cryptocurrency. How could you not? Read this article to find out more about the upcoming trends.
Summary: 5 Minutes read, Level: Advanced
Blockchain, bitcoin and all kinds of cryptocurrencies are everywhere on the news, especially after that huge bubble of 2017 when bitcoin got super famous and had everyone and their entire families invest in cryptocurrencies.
While you may know that bitcoin is a type of digital currency that is being used more and more every day and that cryptocurrency is basically just a virtual or digital currency that uses cryptography as a security measure. We covered two words from the above-mentioned list except for one; blockchain.
According to Wikipedia and many other sources, a blockchain is just a list of records that are called blocks. The way it was designed, a blockchain can’t be modified without altering all the subsequent blocks. With a decentralized public ledger that is basically used to record transactions that are made across multiple computers. The blockchain database is autonomous in the sense that it manages itself by using peer-to-peer network and a server with a distributed timestamping.
This mysterious person or group of people of whom we still don’t know the identity, conceptualized it and implemented it. Satoshi Nakamoto used the words block and chain separately in the beginning, but by the year 2016 they were popularized and started being used as a single word BLOCKCHAIN.
There have been some speculations about the identity of Satoshi Nakamoto. Names such as Nick Szabo, Hal Finney, Craig Wright and Dorian Nakamoto have been said to be under the alias of Satoshi Nakamoto, but there was no extensive proof about it. While we may not know the identity of this person or this group of people, we can rest assured that they may have changed the future of the internet forever.
It has been a complete sensation ever since it was invented in 2008. It is a robust mechanism and it is unique in the sense that it can’t be controlled by a single entity nor it has a point of failure. It has been 10 years now and blockchain has yet to fail. The times where there were problems with blockchain were caused by human error, so we can still say that it is a very safe technology that has revolutionized internet and as of today it is continuing to do so. Due to these facts, many experts have claimed multiple times that it is safer to invest in blockchain itself than in the cryptocurrencies such as bitcoin, ripple, ethereum, dash and litecoin.
2017 was in many ways the “breakout” year for cryptocurrencies and we have seen the might of them. A couple of years ago, few people believed that this would happen and yet when it happened many people were in disbelief of what was going on. Cryptocurrencies have had great success and their market is just extending, with many large companies using them as currencies. Instead of being used for shady transfers in the Dark Net, they are used by companies who even didn’t know the existence of them a few years back.
Now you may ask, how do blockchain and cryptocurrencies link with each other? Well it’s simple: the majority of cryptocurrencies use the blockchain technology to function – starting from the most famous of them all, bitcoin and Ethereum and many other less known cryptocurrencies.
With all this success in just a decade, there are plenty of people who refuse to believe that the blockchain technology is something that might last for a longer period. Many questions were raised in 2017 that had many proponents of this technology worried. The first one was that the transaction costs would get increased and that trading on a system that is based on blockchain might be slower than many traders would tolerate. A mistake would have been irreversible. The reason why it may be slower is that the transactions can happen only when all the respective parties update their ledgers, depending on the case this can take hours.
This was everything about blockchain technology in a nutshell. We´d be happy to hear about your opinions and experiences with cryptocurrencies. Go tell us about it!