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Monday, September 28, 2020

Blockchain – Introduction, Uses and Functions

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Every once a while, you would see the news of cryptocurrencies like Ripple and Bitcoin making the news, for either the amazing gains it has given its investors or the terrible losses one now has to endure with a falling market.

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Either way, you know that cryptocurrencies are something that are here to stay. Yet, in spite of it all, have you been wary about investing in it simply because you couldn’t understand what the hoopla is all about?

That’s perhaps because you don’t know the benefits of Blockchain yet.

What is this blockchain?

Loosely put, Blockchain is an online ledger which contains a record of all confirmed transactions ever occurred. It is a public ledger shared over the entire user network which follows the P2P (peer-to-peer) protocol.

This system signs off all transactions with encrypted keys which is computed mathematically over a huge network of computers.

That key is also called as a seed. There are two kinds of keys, i.e. private and public, for different kinds of transactions. This encrypted key usually comes in pairs and both keys, either private or public are compared with each other for verification.

And this verification is performed with a series of very complex mathematical calculations which requires special computer hardware.

The transactions get added to a queue in the block chain and are evaluated, verified and signed off with these mathematical calculations. A queue means each transaction has to be signed off in the correct order. There is no side-stepping or ‘cutting the line’ involved.

Furthermore, the verification process is carried out on numerous computers in order. So if a transaction, as a part of a ‘block’ is invalidated, the entire block becomes invalid.

This ensures that there is no meddling with the accuracy either. Besides, no one can add or subtract to this block, so manipulation is virtually impossible. This is a part of a process which is called ‘mining’.

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Great concept, but does it work?

The best thing about this technology is that there is no middleman here. All confirmed transactions are stored chronologically in this online ledger and are verified with mathematical proof. So it is theoretically impossible to modify any part of the transactions or records.

This technology is completely independent from any outside influence like the governments, financial institution, or even malicious individuals. This means that you can transfer the currency without fear.

The Top Advantages of Blockchain for Cryptocurrencies

Security

The crypto-currencies are based on the blockchain technology. It relies on cryptographic techniques and practices for each transaction. For each transaction, a person needs to authenticate himself and then authorize.

A wider database where everyone controls what is updated lies in the heart of this technology. So, when you make any transaction, it is authenticated as well as maintained by a number of people. Once an instruction has been made, it is irreversible.

All these features make it nearly impossible for anyone to run a scam. As you will have your personal authentication code, no one else can be able to forge your details.

In brick and mortar establishments, there are innumerable cases of signature forgeries but this cannot happen here.

And, to the top of it, these currencies are market driven and not government regulated. So, when the market is showing growth, you have the total security of garnering profits.

Privacy

When you purchase a cryptocurrency, you get an anonymity. You don’t exist in that digital space as your name or address but a random combination of digits.

It is impossible for anyone to trace you there. In a time when different governments are trying to mine as much tax as possible, it is really the best way to invest your money smartly.

You will not lose your money in paying taxes at different rates to different nations. If you are into multi-national businesses, it is the best one for you. You can have your money wherever you need without getting detected.

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Portability

As mentioned earlier, it is a digital currency which means it relies on the internet and a smart device. No matter where you are, all you need is both of these and you are ready to make a transaction.

As in the case of paper currencies, you cannot travel beyond a certain amount. But there is no such limitation on crypto-currencies. You can carry these currencies with value in millions without worrying about jurisdictions.

Yes, I get all that but I don’t buy this concept.

Nobody’s asking you to. As with any financial transactions in any currency, even cryptocurrency is associated with some risks. Since this is entirely an online matter, it is prone to hacking by malicious individuals. There have been incidents wherein $1 million worth of cryptocurrency was stolen.

But this hacking did not interfere with the blockchain or mining operation. It was the unique IDs and passwords of the digital wallets which were affected.

Since you need a unique ID and a password for the digital wallet where your cryptocurrency is stored, you need to make sure that you keep them absolutely safe.

And the value of these cryptocurrencies fluctuate wildly enough to steer you away from cashing them out in your local, flat currencies. However, it is much better than conventional currencies because of the reasons mentioned above.

Many institutions and individuals have joined the cryptocurrency bandwagon and are reaping the benefits. It’s never too late to jump in and cash out, but you need a little prudence and care in dealing with this monster, especially because it has a free reign and nobody regulates it.

Blockchain is the future and either you are a part of it, or out of it. And there is a lot of explore in cryptocurrencies than just blockchain too. The decision is yours.

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Kingsley Felixhttps://kraftysprouts.media
Based in Port Harcourt, Nigeria. I am the founder of Krafty Sprouts Media, LLC (US), i make sure thing run smoothly and well organized in our organization. Follow me on my social media platforms.
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