What is Blockchain and How Can it be Used?
2018 is set down by many commentators as the year that cryptocurrencies will really take off. There are all sorts of predictions from the suggestion that many new cryptocurrencies will double in value to the idea that there will be a ‘spectacular crash’ within the Bitcoin market as many new prospectors enter the exchange. Whatever the truth turns out to be, there is one thing for certain: cryptocurrencies are going to be fascinating to watch over the coming year. And if you want a front row seat, just have a look at this Bitconnect sponsor code.
But, monetary value aside, there is a fascinating algorithm at the very heart of cryptocurrencies; it is blockchain that has opened the door to the very existence of cryptocurrencies and, without regulation or centralization, it is blockchain that continues to secure cryptocurrencies against hackers and hold traders to account.
What is Blockchain?
Simply put, blockchain is an algorithm that creates a continuously growing list of transactions; it is a digital ledger secured with cryptography. Every transaction made with a cryptocurrency it added to the chain, grouped with other transactions to form a block and then attached to the previous block. It is unchangeable and forms a permanent record.
The real ingenuity of blockchain, though, is that it is decentralized. This means that there is no central database that could be hacked. Instead, it is entirely on the internet, hosted by millions of computers simultaneously, and all the while accessible to everyone. By decentralizing the system, there is no one weak spot that could be manipulated, making the system as safe as possible. Plus, as each block is cryptographically linked to the one before it, it gets more and more difficult for hackers to steal from the chain is layers of encryption are added.
What is Blockchain Used For?
The original use for blockchain was to support the transactions of bitcoin users but it is now used by all cryptocurrencies to authenticate and record all transactions. However, it is important to note that the blockchain system doesn’t have to be limited to cryptocurrencies, it could be used to authenticate any transaction between two people. This means that it could be used for the exchange of goods or even secret information in the future.
Blockchain is particularly exciting in this sense because it could completely revolutionise the way that we interact, cutting out the middlemen and centralized organizations that we are usually bound to use. However, this could have some negative effects too as it may make tracing sources more difficult for agencies and could cause large businesses to flop.
In 2018, the cryptocurrency market and exchange is certainly going to be an interesting development to track, but the use of blockchain and its development will also prove to be dynamic. As governments around the world look for ways to regulate this booming new economy and currency system, they will also have to reconcile themselves with blockchain and figure out a way to incorporate it into our lives.