While cryptocurrency is an interesting concept to tackle, the technology behind this form of "money" is even more mind-boggling (and we mean this in a good way!). The blockchain, which is essentially a constantly updating list of transactions, may very well be a force that can disrupt all sorts of industries.
Let's list down 3 important points on why this technology matters.
Because decentralization matters
Why does the blockchain, which is just a way to list transactions or data activity, such a hit? Well, the concept is simple - but behind the scenes, it's complicated but rewarding for all involved. Essentially, this list of transactions (or popularly called, the ledger) is shared among all users/computers in a given blockchain. If an update on the ledger is done, everyone gets to see it as well.
Every computer system on this particular blockchain must also accept the new transaction(s) done. Doing so will let everyone get the same set of data to view or check.
What makes this an innovative tech is its decentralization. With no governing body or main server, everyone gets a transparent view on what's going on. No single user or system gets to singularly control what's on the blockchain. Everything is tracked instantaneously.
Think of it this way: it's power to the people, with no way for an entity to go take it all for him or herself.
Hashing: protecting assets
Since it's transparent, will it be safe for everyone? Well, there's that "crypto" part in cryptocurrency! By means of hashing, a cryptographic term of converting data into a long string of jumbled characters, every activity done on the blockchain is both recorded and protected. A corresponding hash will be attributed to a change/transaction, no matter how small/big the action is. As such, assets are safeguarded from harm or potential hacks in this ledger.
Confirming who's who (without even knowing who's who)
Let's explain more about how valuable cryptography is in a blockchain. Considering that every action or transaction has a corresponding hash, the blockchain also requires the use of "digital keys".
The keys actually involves a two-fold process: a user uses his or her key to transact assets in the blockchain; another key is used to let others know that it's a legit user completing the transaction.
In a way, it's still transparent - everyone knows that these assets are being transacted. And it's still safe - no need to expose or reveal sensitive information, since the blockchain also notifies others if it's a real user or not. Cool, right?
These imaginary numbers fit perfectly right in the real world
Now, think about it. How do these three blockchain concepts work in real-life scenarios?
Well, the possibilities may just be endless! The money aspect is currently making its waves with BTC's popularity. Say goodbye to shady voting systems (the blockchain records and notifies all of legit actions). The real estate industry may even make use of the ledger system to note down properties and the like.
Who would have known that something this complicated would work wonders for all.
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