What It Is and How It Could Change Our Lives; the Hidden Economy Revealed
Have you ever heard of Bitcoin? Then you’ve heard of blockchain as well, as this is the perfect example of a blockchain. That you’ve heard of blockchain doesn’t mean that you know what it is though, and that’s what we’ll be talking about here, but not just that. We’ll be talking about the impact that blockchain will have on our economy as it’s slowly growing.
What is blockchain?
Blockchain sounds like a new invention, but it has been around for quite some time, although it has really become popular since the start of Bitcoin. In essence Blockchain is a new kind of economic system that works based on a couple of principles.
The blockchain is a network that is made up of nodes, these nodes are all the computers that are connected to the network. Every node is an administrator of the network, and with the lack of a central power, the network is decentralized. This is one of its most important features, as it rules out the need for a third party when you want to make a transaction with someone, without having to trust the other person. Each node has the network saved onto it and therefore the network is completely transparent. On top of this the lack of a central power makes corruption close to impossible. The network is based upon the making of transactions constantly, which goes in the following way.
One person wants to send out a transaction and it is put into a block along with some other transactions. Putting a new block on the chain, and therefore verifying the transaction, can be done by the next node that solves a complex mathematical problem. The people that use their CPU to solve these mathematical problems are called miners and receive a reward for their work, they keep the system running.
How is blockchain going to change our lives?
So, blockchain is an inventive mechanism that allows us to transfer cryptocurrency, but also information or reports, without having to trust people and without a centralized third party. These are some amazing qualities, but we shouldn’t forget one.
The currencies that currently dominate our world, like the dollar and the euro, have no real value. Governments can print as much of it as they want, which could cause inflation and could eventually drive the value of these currencies back to zero. We’ve seen plenty of these currencies go back to zero because of this, and this is where cryptocurrency is different. Cryptocurrency, like Bitcoin, has a set amount of its coins available, and will therefore keep its value. This makes Bitcoin more of a trustworthy currency than dollars for example.
This one of the reasons we believe that blockchain networks are the future of our financial system. Blockchain currencies are way more transparent than any other financial system and it is also a lot more resistant to corruption. Since there is a lot of corruption in the economic world now, blockchain could bring a change to that.
Another issue that can be solved by blockchain is the lack of person registration, as blockchain can offer people a digital ID. Estonia is already doing this by offering its citizens ID cards based on a blockchain technology. And this could be the future for the rest of the world as well.
Blockchain technology is seen as the biggest development since the start of the internet, and since it is only just on its way to rise we expect to see big things from blockchain technology. Thus, it is up to you to get familiar with Blockchain and all it must offer, this way you’ll be prepared when Blockchain technology slowly starts to take over the world and becomes the next big thing.