Recently, the attention of people is increasingly attracted by the technology of blockchain, which underlies the Bitcoin cryptocurrency. However, in most cases this term is used as some kind of magical spell, in the end, it is clear to a normal person that it’s cool, but nothing more than that.
In fact you won’t find any magic, of course. The technology is beautiful, but not so difficult as it seems to be. Let’s try to explain how everything works, in an easy way — without abstruse mathematical formulas and technical terms. OK, we will not manage to do without technical terms at all, nevertheless, so let’s start.
What is Bitcoin?
How to determine Bitcoin (btc, Btk, bitcoin) in simple words? This is a new generation of decentralized digital currency, created and operated only on the Internet. Nobody controls it, the currency issue occurs through the work of millions of computers around the world using a program for calculating mathematical algorithms. This is the essence of Bitcoin.
For Bitcoins, you can also buy anything on the Internet, like for dollars, euros or other currencies, and it also has been traded on different stock exchanges. Let’s look at the most important features of Bitcoin:
– Easy to use;
Well that’s good. What is the blockchain then?
“Blockchain is a distributed registry for storing data …” — for sure you have heard this explanation many times. Nevertheless, this notion didn’t clarify the picture. So, blockchain is a database that is simultaneously stored on a set of computers connected to each other on the Internet. Each transaction is written down and safely stored.
Why it is needed, it is better to explain by example.
Imagine that you sent 100 $ to your aunt in Brazil by bank transfer. You filled in a dozen fields in the form of a transfer, after which the bank officer debited the money from your personal account and credited them to a single bank account for international transfers. Then another employee transferred this money to the account of the agent bank that transferred them to Brazil, where they will fall on the same chain to your aunt’s personal account.
Three days later, your aunt will receive 97$ (minus commissions of all banks) — if there was no mistake in the transfer. The worst thing is that none of the participants are able to track this money during these 3 days.
A sudden server crash, a banker’s dishonesty or a hacker attack will start a long investigation and find the person responsible for the return of your money. But the same can happen at any time with all the money in your account. Hence, you have to rely on the system every day and trust your bank.
Blockchain has the capacity to change the situation completely. You transaction will be conducted in seconds and safely stored on the chain. So each participant of the system can track the transaction down, without revealing your identity.
Where blockchain can be useful?
Despite the fact that the interest in Blockchain is more related to the area of finance, the scope of distributed registry technology is not limited to it. Below we will list the main areas applicable:
– Operations with goods and raw materials;
– Precious stones authenticity;
– Digital identity, authentication;
– Organization of private and public administration;
and many many more.
Blockchain to use or not to use?
Even if you still don’t believe in Bitcoin as the currency, you definitely should use the other advantages opened up with Blockchain; transparency, speed, cost, simplicity. If you sent information on the blockchain, the evidence of such transaction cannot be changed or faked, as it is confirmed by hundreds of thousands of computers around the world. Your data will always be safe and sound, no leakage, no loss.
If you are a businessman obviously you will like the concept of easy loans, cheaper banking and e-proof of identity. If you store money and information in the blockchain, the records will never be lost or tampered with, any market participant can at any time make sure of your financial solvency. No third parties and intermediaries, only full transparency and mathematical guarantee of accuracy of calculations.
Ashish Sharma is the Chief Marketing Officer at WeDigTech, a Mobile App Development Company in LA California US. He is responsible for marketing activities that have to do with creating, communicating and delivering offerings that have value for clients or business partners.
Difference between Blockchain Vs Bitcoin. Blockchain it’s not just about Bitcoin was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.