What is the Blockchain and how does it work?

  (photo credit: INGIMAGE)
(photo credit: INGIMAGE)

When it comes to the most popular technological trends of the 21st century, blockchain seems to be cementing its status as one of the frontrunners. The whole concept of the blockchain was first developed in order to support Bitcoin, a kind of cryptocurrency. However, the blockchain has grown to become the primary source of power for numerous cryptocurrencies and could potentially be the central hub for the future of all online transactions. Many developers are working hard on integrating the concept of the blockchain into various fields such as medicine, art, fashion, and finance. In this article, we are going to go over what the blockchain is, how it works, and how it can be applied to everyday life.

What is the Blockchain?

Think of the blockchain as a digital ledger that takes note of different transactions that are conducted via the internet. This ledger is maintained by a network of different computers, thereby making it difficult to hack or manipulate. Since the responsibility of maintaining the ledger is spread out across computers all over the world, any kind of currency that is built on blockchain technology is often referred to as decentralized finance. With standard fiat currency that continues to be the mainstream financial language of most people today, money is typically regulated by governing bodies and centralized agencies. However, with blockchain technology, all financial transactions that take place are more democratic in nature since everyone plays a part in securing the digital ledger without the intervention or oversight of a government, bank, or any kind of authoritative body.

Is the Blockchain Secure?

As more information is recorded onto the blockchain, these data points are stored as blocks. All of the blocks that exist on the blockchain are linked together using a method of cryptography in order to make the data and information more secure. Then, each transaction is independently verified by peer-to-peer computer networks that borrow from the concept of torrent file sharing. These transactions are time-stamped and added to the blockchain and can never be altered or manipulated after the fact. Since there’s no way for the blockchain data to be altered or manipulated, any transactions that take place through blockchain are often considered safe and secure.

How is the Blockchain Used?

Ultimately, there is so much potential to the blockchain that it remains to be seen just what this technology is truly capable of. However, currently, blockchain technology is primarily used to power the movement of cryptocurrency. Many tech and finance experts dub cryptocurrency as the future of finance, wherein any kind of financial transaction is decentralized and is far more secure than what current financial systems are offering. There are various cryptocurrencies that already exist which are making use of blockchain technology. Bitcoin is the most popular and most valuable cryptocurrency in circulation. However, there are also other popular currencies like Ethereum, Litecoin, Polkadot, Dogecoin, and Tether to name a few.

Essentially, these cryptocurrencies function in the same way that standard money functions, except the fact that cryptocurrencies can only be exchanged online through the blockchain technology. Cryptocurrency owners can trade money with one another for private transactions, but they can also transact with commercial establishments that have cryptocurrency features integrated onto their platforms. Most notably, Tesla is known to accept Bitcoin as a viable form of payment for any of their cars. This is mostly because Tesla and its owner Elon Musk are heavily invested in Bitcoin themselves. Another way that it’s being used is through entertainment gaming sites like Mbitcasino.  Keep in mind that one of the major pros of cryptocurrency is the security and anonymity that comes with every transaction. There are many gamblers all over the world who want to keep their data, information, and financial activity as private and secure as possible. This is why a lot of online casinos are now offering cryptocurrency functionality on their platforms.

As was mentioned earlier, blockchain technology is slowly cementing itself in various aspects of existence that stretch beyond finance and entertainment. Much of its potential centers around its functionality within a metaverse, which is another emerging technology on its own. While it may not still be considered mainstream technology currently, only time will tell just how quickly this trend will rise as it continues to roll out in various forms all over the world.  

This article was written in cooperation with Koral Group