"I really like Bitcoin. I own Bitcoins. It’s a store of value, a distributed ledger. It’s also a good investment vehicle if you have an appetite for risk. But it won’t be a currency until volatility slows down". David Marcus, CEO of PayPal.
The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. The identity of Satoshi Nakamoto remains unknown to date.
The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications and blockchains that are readable by the public and are widely used by cryptocurrencies. The blockchain is considered a type of payment rail.
Private blockchains have been proposed for business use. We just thought it wise to bring some aspects to keep in mind before throwing yourself in the use of blockchain, and we won't start without telling you what blockchain is.
what is blockchain technology and how does it work
Table of Contents
Some important aspects to know about Blockchain
What is Blockchain?
Blockchain seems complicated, and it definitely can be, but its core concept is really quite simple. A blockchain is a type of database. To be able to understand blockchain, it helps to first understand what a database actually is.
A database is a collection of information that is stored electronically on a computer system. Information, or data, in databases is typically structured in table format to allow for easier searching and filtering for specific information. Spreadsheets are more like a database but are less complex and less complicated to use, so one should know what a database is and what a spreadsheet is.
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So Blockchain has been an important aspect in many people's life and has helped many in doing one activity or the other. And so in this article, we will try to bring to you some aspects about blockchain that make blockchain a recommended platform for bitcoin transactions. So, What are some important aspects about blockchain that one should know?
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In an attempts to answer the question above, we will bring to you in the next part of our article how blockchain is used by many companies(I); Some Advantages (II) and disadvantages(III) of using Blockchain.
I. How is Blockchain used?
Blockchain has a lot of uses and a lot of reasons why people tend to bring themselves towards this platform. And here are just a few of them in brief.
Traceability; As we now know, blocks on Bitcoin’s blockchain store data about monetary transactions. But it turns out that blockchain is actually a reliable way of storing data about other types of transactions, as well.
Blockchain is very good at keeping past records and any mistake done during a transaction will be stored and one can easily just return to checkout the history and trace the transaction that brought a problem to a file or document.
Banking and Finance; Perhaps no industry stands to benefit from integrating blockchain into its business operations more than banking. Financial institutions only operate during business hours, five days a week from Monday to Friday. But Blockchain is available 24/7 and any transaction can be done anytime and anywhere just with the use of your device.
Bank transactions might also take a longer time for transactions about 2 to 3 days for the processing of some transactions but with Blockchain implemented, these transactions tend to take not up to 15 minutes.
With blockchain, banks also have the opportunity to exchange funds between institutions more quickly and securely.
Currency; Each country has a specific currency they use like the Euros, Dollars, Pounds and many other currencies and when you leave the country, you must turn to the bank in that country to be able to access the new currency and you must change the currency or the bank notes in your pockets.
So with the implementation of Blockchain, no need to stress after all these currencies are in this platform so you can easily travel anywhere you go with your money saved virtually, you will just need to withdraw. Depending on which grounds you are, or which country you are in, you receive money with that currency and so Blockchain contains all the available currencies(if not all but most of them).
These are just a few ways Blockchain works and in the days to come, we will update you with all the ways Blockchain works and it will be more detailed.
The Advantages and Disadvantages of Using Blockchain
After knowing how Blockchain is used, these are some advantages (1) and disadvantages (2) of using Blockchain
Advantages of Using Blockchain
- Improved accuracy by removing human involvement in verification
- Cost reductions by eliminating third-party verification
- Decentralization makes it harder to tamper with
- Transactions are secure, private, and efficient
- Transparent technology
- Provides a banking alternative and way to secure personal information for citizens of countries with unstable or underdeveloped governments
Disadvantages of using Blockchain
- Significant technology cost associated with mining bitcoin
- Low transactions per second
- History of use in illicit activities
- Regulation
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First proposed as a research project in 1991, blockchain is comfortably settling into its late twenties. Like most millennials its age, blockchain has seen its fair share of public scrutiny over the last two decades, with businesses around the world speculating about what the technology is capable of and where it’s headed in the years to come.
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After 27 years of use since its implementation, blockchain stands to make business and government operations more accurate, efficient, secure, and cheap with fewer middlemen as the days goes by. As we prepare to head into the third decade of blockchain, lets be ready to get more good things pop-up from this Blockchain and its technology.
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