Let us start with a scenario. Whenever there is an election, we always hear the rumor that there is rigging in the election. In the end, the result is either re-election or a recount of the votes. This whole process is a waste of time and money. If we cannot believe this system the first time, how can we do it a second time? And it is a great scenario where blockchain can be used in real life.
Now, what is the Blockchain?
If you search blockchain on google, you get millions of results that tell us about blockchain. Judging by these millions of findings, it turns out that blockchain technology is one of the cutting-edge and popular technologies. Blockchain is a decentralized, transparent, and trustless system in which there is no need for any middleman or central authority. The best example of this is all companies like banks, where the middleman is involved. Blockchain is a trustless system, and it uses algorithms to build trust within decentralized systems. Often, we hear a word with blockchain is unchangeable, which means that whatever is written once inside the blockchain can never be erased again. Blockchain performs two functions, reading and creating.
Most people think that blockchain is bitcoin and limited to cryptocurrency or only the financial industry uses it. But in fact, blockchain can solve lots of real-world problems like we talked about voting system in the beginning. So, blockchain is an online distributed system in which you store information, and this information can also be access by other parties. All information is store inside a block or container like a register. And all the accounts we call block/register link to each other like a chain, as its name suggests blockchain.
There are three things in each block within the blockchain.
- Data of the block: This block contains all information like sender, receiver, coins, source, or destination address, etc.
- Hash of the block data: it is known as the backbone of blockchain. Hash is the encryption technique uses to secure the data. It is never easy to decrypt the hashes as they use a fixed length of alphanumeric for encryption. And the hash value always stays unique.
- Hash of the previous block: Help to create a chain with the previous hash of the block.
“ P2P lending is undoubtedly the best way for entrepreneurs and small businesses to get the financing they need to grow. “
-Radoslav Albrecht, founder of Bitbond.
There is another characteristic of blockchain, which is known as a peer-to-peer network (P2P). Inside this network, the parties send money or messages directly to each other without any central authority. One of the advantages of this is that no party within the blockchain can deceive anyone. Because each party contains a copy of the ledger, and whenever there is a transaction, each party notes it down.
Blockchain Transaction Process
Blockchain uses a concept named Proof-of-work. The ledger is public, and participants can view it as well as can add a new line. But to add this line, each party has a public and private key; miners solve the algorithms using public and private key, and it has a string of numbers which is up to 256 bits. These signatures are uses for verification, so no central authority is required, as there is a block verification from proof-of-work.
For example, if someone creates a new block and broadcasts it on networks, then every node verifies it; if the block is valid, they will add it, otherwise removes it.
The future of money is a digital currency.
– Bill Gates.
In this fast-paced digital world, the currency has also taken on a digital form, and this digital currency is called cryptocurrency like bitcoin. A cryptocurrency is a virtual currency that was first introduced in 1983 as electronic money. And since 2009, the most popular cryptocurrency is the bitcoin. The cryptocurrency is not like real coins, but it is saved inside our digital wallet.
Central authority like government controls our dollar, euros, etc. But there is no such control over cryptocurrency. Cryptocurrency like bitcoin does not follow the traditional banking system, but it transfers from one digital wallet to another. Not only is bitcoin a cryptocurrency, but there are many different cryptocurrencies. Some popular cryptocurrencies are Ethereum, Litecoin, Ripple, Libra, and Tether. You can invest in them and buy and sell them as effortlessly as bitcoin.
Many companies like PayPal, Walmart, Amazon, etc., are now accepting bitcoin payments because of its popularity. As well, bitcoin uses in a variety of things, such as shopping, trading, traveling, or food. The cryptocurrency was illegal within many countries, but now every country is slowly accepting it. In countries like China, Japan, Romania, USA, the number of cryptocurrency users is exceedingly high.
Bitcoin Transaction Process
“ Bitcoin will do to banks what email did to the postal industry. “
-Rick Falkvinge, Swedish Pirate Party leader.
Online Services and Tools for Cryptocurrency
There are many tools and online services available to invest in a cryptocurrency. You can start investing using a minimal amount of money. According to the market demands, the price of bitcoin fluctuates. When using a cryptocurrency, keep in mind that it can be profitable, but it is also risky. So, before buying any cryptocurrency, do good research on it. Therefore, there is less risk and more profit. Investing in bitcoin is like spending in stocks; however, bitcoin is unpredictable due to frequent fluctuations in bitcoin.
There is a list of services that allow cryptocurrency investment.
Coinbase is famous, as they allow us to invest USD instantly. Parties can purchase Ethereum, Bitcoin, and 30 more cryptocurrencies from the platform. Besides, participants earn interest on their dollars, and they receive token rewards by performing numerous activities. They also reward 5$ for opening a new account.
Gemini is a famous platform for investing in cryptocurrency due to its transparency and security. Compared to other platforms, Gemini considers the protection of its user’s data to be of paramount importance. They also reward 10$ for opening and depositing 100$ on a new account.
BlockFi is a platform that allows you to take interest or lend on your belongings instead of selling coins or tokens. They also reward 250$ for depositing 25$ and maintaining it for a decent period.
Kraken is not as easy as the other platforms on the list because it’s a real cryptocurrency exchange platform. Kraken has a great choice of coins and tokens for trading. Kraken is a platform that allows you to trade in not-so-common and risky coins/tokens such as DOGE.
eToro was limited to Europe and UK but now united states traders are allowed to use it too. Etoro provides a trial account before starting actual trading. They have announced to reward 50$ to those who open a new account and do trading of up to 1000$.
The world is becoming more and more technologically advanced. Blockchain has become one of that technology that can solve real-life problems. Blockchain is a decentralized, transparent, and trustless system in which there is no need for any middleman or central authority. Proof-of-work is a blockchain algorithm uses to add and validate new blocks within a network. Cryptocurrency is electronic money that comes in a variety of forms, and the popular one is Bitcoin.
“ Everything will be tokenized and connected by a blockchain one day. “