With the growing popularity of the cryptocurrency trading and the whole industry, more and more people become interested in the details behind how this whole system work. Every day we hear about the blockchain and those who are not knowledgeable of the industry probably have many questions regarding it. The following article will try to discuss the topic in more details so that beginners can get a better grasp on what it is about.

How Did Blockchain Technology Come Into Existence?

Blockchain technology first got its implementation in order to support transactions with Bitcoins. As most know, Bitcoin was the first cryptocurrency to get decentralized and available for mining and trading for the ordinary people.

Interesting Fact:

The name Satoshi Nakamoto is an alias of the person (or the group of people) that first designed Bitcoin. To this day his /or her for that matter, or their/ real identity is unknown. Bitcoins work on a blockchain database.

The Bitcoin is a digital, artificial currency that is limited to 21 million coins. The process of digging out and harvesting these coins is called mining and it determines the supply. And because the supply of the cryptocurrency is limited, its value is steadily growing as demand increases. So far, around 17 million coins have been mined.

Mining is the process by which new coins are released – by solving a constantly evolving in terms of complication mathematical formula. It is also the process of verification of transactions and their addition to a public list, a ledger – the block chain. In this ledger is contained every transaction of a Bitcoin or fractions of it.

Is the Blockchain Technology Exclusive to Bitcoin?

The answer is no. It might have been developed to support the Bitcoin and the application of the coins. But its value has been made obvious and since then it has been utilized in a multitude of fields and industries.

This wide application of the blockchain is due to the fact that this type of technology provides a safe way to keep records of all sorts. This implies that costs are cut in terms of record keeping because the involvement of third parties (or more) is no longer required. The whole process is optimized regarding speed through the usage of blockchain technology.

Application of Blockchain Technology

The blockchain is used to make entries thus creating the so-called Ledgers of information. A Ledger is a database of transactions that are recorded and announced. These can be two types:

  • Public Distributed Ledger – features information that has been replicated and synchronized digitally across multiple entities. It is decentralized and the information it holds is available to governments and the public in general.
  • Private Ledgers – these are ledgers used in companies and large businesses and the information in them is exclusive to the said company.

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What Is the Future of Blockchain?

The potential of the blockchain is still barely tapped. We are to see bigger developments in the future because of its popularity:

  • It is cost effective, as it removes the middle-man.
  • It is time effective as information is compounded and in great detail.
  • It is safe and secure as recorded transactions cannot be altered once they have entered the blockchain.

These are just a few of the positive aspects of the blockchain technology and its application. Its main advantage is the fact that this digital ledger can be adjusted to record all information of value, not just financial transactions. It is not vulnerable to hackers because it is not centralized.

Just like the development of the Internet has changed the lives and businesses on a global scale, the same is expected to happen under the influence of the development of the blockchain technology. Only the future will reveal to us its full potential.

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