A big reason the internet is booming as an avenue for trade and commerce is because it is so convenient. It doesn’t restrict you to your city, state or country, nor does it limit what you can and can’t get in one website. With cryptocurrencies, the boundaries have only blurred further. There is no restriction on sending money to anyone, and so anyone with an internet connection can sell a product or service to the world. This spurt in economic avenues has come with its own problems, however.
A prime problem is the lack of an irrefutable record of transaction that in everyday life is recorded by banks. The bad press e-commerce gets due to cons and scam artists makes people apprehensive about buying things from the internet, outside of the safe havens of Amazon and other e-commerce websites. Despite Bitcoin’s intimidating growth in popularity, this is one hurdle still tying it down.
Where Blockchains come in…
There is a way out, though. It is through using a Blockchain, a technology borrowed from the same field of cryptography that Bitcoin itself belongs to. It wouldn’t be wrong to say it is impossible to fool, and that is why it is likely going to be what will save the cryptocurrency-dependent economy.
It is quite a simple concept to understand. A transaction you generate is recorded, and this record is stored as a page of data. This page of data is impossible to alter to fake once generated, which makes the name block only more appropriate. This block is then copied and saved to many devices that are part of the system, giving rise to a chain like structure where each piece of data is connected and verifiable to data stored elsewhere.
What about Privacy?
The system respects privacy of participants who might not want their online activities to be traced back to their real world identities as well. The record can be traced back to your internet identity, but no records or markers of your real identity are essential to use the service or buy and sell to someone via BTC.
To change one block or make a fake record by decoding and re-encrypting it appropriately is a herculean task. To do it across the several devices it has a copied stored is downright impossible for even PCs with the most CPU power.
There’s more. Blockchain consume CPU resources and power, not to mention your internet. The developers thought of this as well, which is why members are automatically eligible for reward for being part of the Blockchain. The reward can be seen as a way to compensate for the cost of the person’s PC resources, or even as a neat way to earn maintenance for your PC, though the amount you earn may vary with service.
Will blockchain fly or fall flat?
The technology is not just restricted to Bitcoins either. It can very well be developed and extrapolated to usual currency exchanges taking place online, given how e-commerce and services like prepaid card apps are gaining footing in the market. Blockchains in this format can potentially be our new Account Managers as well as bank agents. Giants like Ernst and Young have started distributing cryptocurrency wallets to their employees (albeit only their Swiss employees thus far), as well as installing cryptocurrency ATMs. A Big Four firm taking this step speaks volumes of the prospects this service is set to enjoy in the near future. Especially since the reason cited for the distribution of the wallets has been to keep employees at pace with the latest developments in economics. Internet based Economics will perhaps be the sliced bread of our generation.
Blockchains are set to get more popular as more and more uses for it are developed. Using it as an undeceivable online passbook is surely among the most promising applications of the technology. There is also the possibility to clean our political systems of fake votes and rigging by using blockchains to keep anonymous records of votes. Corporations are already using it to manage their inventories. Things look really promising for Blockchains. Techiespad has an infographic that tells you everything you need to know about the technology. Check it out below.