What is The blockchain?
Blockchain: the single most confusing term since Bitcoin. Everyone has a vague idea of what it does. It’s either the ultimate evolution of financial technologies, or a silly made up IT term that is used to make money of Bitcoin. In reality, it is rather the first than the second, it seems that a lot of major firms worldwide are already making use of the Blockchain. So lets get you up to speed.
It is all relatively easy to understand. The Blockchain is a public ‘’excell sheet’’ where transactions are recorded and confirmed anonymously. It’s a record of events that is shared between many parties. More importantly, once information is entered, it cannot be altered. So, if the blockchain is the public record, what is being recorded? What are all of these “transactions”? And what is in it for you? Look no further, we got the answers.
Why You Should Care
The technology of the Blockchain promises to change dozens of industries from Financial Tools, Food Industries to Real Estate and Voting. The Blockchain space has attracted billions of dollars in investments from some of the biggest firms (Fidelity, IBM, JP Morgan). Already millions of people around the world are using blockchain to save money and make their lives easier. Understanding the Blockchain is the first step to be able to benefit from its strengths and profit from its explosion.
”The blockchain cannot be described just as a revolution. It is a tsunami-like phenomenon, slowly advancing and gradually enveloping everything along its way by the force of its progression.”– William Mougayar
Lets get into the Blockchain
We already established that the Blockchain is a public record of transactions. It’s also distributed, so instead of one person controlling everything, there are thousands of computers around the world connected to a network, which are controlling the transactions. Thousands of computers in a network come to an agreement together on which transactions are valid.
These thousands of computers together come to an agreement on which transactions are valid. Whenever someone makes a transaction, it is send to the network, and the computers run complex algorithms to determine if the transaction is valid.
If it is, they add it to the record of transactions (the uneditable excel sheet), linking it to the previous transaction. This chain of linked transactions is known as the blockchain. Since the transactions all reference the one before them, you can figure out which ones came first, thus ordering them.
Fun fact: This means that you can actually check out the first transaction made on the blockchain. See it here: https://www.blockchain.com/btc/tx/4a5e1e4baab89f3a32518a88c31bc87f618f76673e2cc77ab2127b7afdeda33b
One of the big strengths of the Blockchain is its security. Since thousands of computers are involved in validating transactions, to hack the network you need to break into thousands of computers spread throughout the world.
Every computer in the network keep records of the Blockchain, so if you want to manipulate it, you need to manipulate it on thousands of computers at once. This is a feat that is significantly more difficult than hacking a traditional database, and no one has managed to come close to ever hacking a Blockchain.
Smart Contracts are pieces of code that sit on the blockchain. What makes them special is that because they are a part of the blockchain, no one can manipulate them. Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman.
The best way to describe smart contracts is to compare the technology to a vending machine. Ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop a bitcoin into the vending machine, and your escrow, driver’s license, or whatever drops into your account. More so, smart contracts not only define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations.
The advantages of the Blockchain
Blockchain also has the potential to reduce costs and eliminate a lot of waste. It’s shared, public transcript can make the job of auditing records much faster and easier, but the big
advantages here come from Smart Contracts.
A New Frontier
This immutable, transparent means of conducting transactions through a smart contract has a big effect on how we buy and sell goods, exchange information, and agree on what is true. In this new world, we don’t need to trust another party, we can always verify the contract, its contents, and its history for ourselves. We don’t need to worry about any company manipulating the news (on a Smart Contract, everyone could see how the algorithm works). Corrupt governments and hackers can’t rig elections when voting records are designed to be un-editable. This is a major shift in thinking that opens up worlds of new possibilities, and the benefits are still just emerging.
How can you invest in this new technology?
Investing is the easiest way to make money with the Blockchain, and the best part is that the Blockchain is specifically designed to be easy to invest in. You don’t need to be a Venture Capitalist of Accredited Investor to buy in to the Blockchain. It’s as easy as setting up an account on Binance, Coinbase, Huobi, or any number of other online exchanges, you can check our list of exchanges right here and start trading today.
The blockchain is an incredible new feature to our online world, where trust is one of the biggest issues in our modern civilization, the Blockchain offers a solution. The Blockchain offers transparency above making money.