If you haven’t been living under a rock, you’ve probably heard about this popular new form of currency being exchanged digitally called bitcoin. Classified as one of many cryptocurrencies now being traded in the market, it shot to fame after it soared to record values, bringing other altcoins into the spotlight. Because of this, digital currencies are now slowly but surely making their way into our legal financial system.
But you might ask, how safe is cryptocurrency? Thanks to blockchain technology, safety issues are continuously being addressed.
Blockchain is the only technology that makes it possible to transfer digital assets among users while addressing security and trust issues. It’s a decentralized database or digital ledger of transactions that anyone on the network can see through cryptography. It is the answer to the challenges posed by cyber attacks and data breaches, so setting up blockchain to facilitate secure trades with your chosen cryptocurrency is the norm, which can be done even through a mobile app.
To keep you up to speed with the technology, here are some essential facts that you need to know:
- Blockchain is not merely virtual currency.
Bitcoin and blockchain may both be a part of the same discussion, but they are not the same thing. Blockchain technology is merely a tool that makes bitcoin and other altcoins viable. And while it may be the most popular use of the technology, it has more to it than trading cryptocurrency.
There are now many uses of blockchain technology. This may prove invaluable in voting for instance. Through blockchain, votes are going to be extremely tough to alter once made due to its transparent nature.
- Blockchain records cannot be altered.
To put it simply, whenever a transaction is made, all the accounts on record are updated with the information. These transactions are then grouped together in blocks, which are linked to every block that comes before it. The result is a chronologically substantial record that nobody can tamper since each block gets a reference to the hash of the block before it. The system is built to make sure that the positioning of the blocks is static and cannot be changed.
- Blockchain is transparent.
The mechanism of blockchain technology is designed to be transparent, so everyone involved in the transactions is accountable. It ensures that there are no errors or missed transactions, making everything traceable even if there is an activity without the consent of the parties involved. Each transaction is recorded in a connected system of registers which are also connected within a secure network.
All this is possible through the network that works in a state of consensus under a system that audits itself automatically every 10 minutes. And since the digital values are self-audited and updated with a transaction in short intervals, the whole network is hard to override. This makes all the information on the blockchain safe at all times.
- Blockchain is decentralized technology.
There are abundant benefits we can glean from blockchain technology due to its decentralized nature. This enables businesses to monetize open source protocols for exchanges without the governance of a central authority. One of the most important benefits for businesses is rapid commerce.
There may be many who are still not accepting of what blockchain technology can offer since they are still quite uncertain and even skeptic of its applications on cryptocurrency and its effects on the financial sector. But once businesses across different industries start recognizing how this technology can benefit their operations, its integration is going to be widely accepted. This can help us move forward to more transparent and more reliable transactions.