Words like bitcoin, blockchain and other cryptocurrency buzzwords have probably been flooding your news feed, but it’s not as simple as heaping them all together and considering them digital currency. In fact, the entire field of cryptocurrency is much more vast than purely monetary value. While you don’t need to completely understand these terms to benefit from using them, as they become household names you may want to have general comprehension.
Blockchain Keeps the Record Straight
Blockchain removes the middlemen or in other words, banks. It’s the infrastructure that makes the actual digital accountable cash possible. Blockchain can be defined as “a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central recordkeeping,” as explained on Investopedia.
Blockchain opens the door for As described on BlockGeeks.com, “A kind of self-auditing ecosystem of a digital value, the network reconciles every transaction that happens in ten-minute intervals. Each group of these transactions is referred to as a ‘block,’” hence the name. Because of its self-monitoring, secure design, Blockchain opens the door for a decentralized system for doing business and completing transactions outside of banks. The decentralization factor is a major draw toward this sector because, after the banking crisis in 2008, people wanted a stable, independent system. That being said, it only accounts for a portion of blockchain applications.
Cryptocurrency Classifies the Currency
Cryptocurrency and blockchain have become synonymous, but really they help make the other one successful and functional. If blockchain equates to the banks, then cryptocurrency matches their capital. The crypto difference is that it doesn’t vary based on country or continent. This term lands at the top of the digital finance hierarchy. We then delineate different forms under the cryptocurrency umbrella. Consider it a high-end asset, but within this classification, a variety of values actually exist.
Bitcoin: The Naira of Cryptocurrency
Commonly referred to as ‘digital gold,’ Bitcoin has made a name as the most popular form of cryptocurrency due to its broad application and widely known name. These coins boomed over the past year and currently equate to a massive trade value and huge returns on the investment. Of course, given the controlled amount, we need to remember that the cash value is actually much less than the trade-value.
The Bigger Blockchain Picture
Blockchain doesn’t just change the finance industry. There are much larger implications resulting from the new technology. Think how such a secure system for tracking data can be applied to a host of sectors. Think more secure voting. Consider the help it offers to cybersecurity. It also creates a more accurate data set to derive analytics from.