The blockchain technology has created a buzz in this current generation. This emerging platform creates a substantial impact on the world of financial services. To put it simply, Blockchain is a technology designed to streamline business processes. This technology can lessen the level of difficulty in getting things done. To accomplish its primary objectives, blockchain operates on five important fundamental concepts as follow:
Decentralized systems are easy to develop even without consensus, while consensus is achievable in centralized systems. This type of innovation defines the field of decentralized consensus wherein building a decentralized system is possible while independent nodes can reach a shared point of view of reality.
When it comes to exchanging shares, money, and even properties, Smart Contracts play a vital role in ensuring a conflict-free transaction without the need to avail the service of a middleman.
Smart Contracts work like a vending machine in a way that you need to pay first before you get the service or product. With Smart Contracts, you need to provide a Bitcoin to your ledger then you escrow whatever gets credited in your account. It does not only define the regulations and penalties in an agreement but takes action in implementing and enforcing those obligations.
Advanced Computing Systems
Blockchain’s decentralized system is a perfect combination of a massive-scale processing system. Giant projects which aim to develop decentralized supercomputers and cloud computing free from vendor lock-in are considered to be ambitious projects that are still in its early age.
Shared Ledger Technology
The main concern presented in relying on a third party entity to facilitate financial transfers and agreements is that they are centralized. This issue is the reason cryptocurrency exchange and blockchain technology were created. Both provide a means of maintaining the register without a centralized financial institution.
Ledgers are considered as the foundation of accounting. Today, digitization has been utilized for most logistic documents and papers. Together with the discovery of new algorithms, distributed ledgers have been the new buzz in the cryptocurrency exchange world.
As a database that is held by each participant, the distribution is guaranteed to be unique, and a central authority does not interfere with records. Instead, these ledgers are constructed and independently held by every node. Once consensus is achieved, that means the ledgers are updated, and nodes have their copy of the ledger.
One of the best and practical ways to apply the blockchain technology is for Cryptocurrencies. This digital asset is created as a medium of exchange via cryptography to control and secure transactions and the creation of currency units.
In this sense, the usage of cash has been gradually decreasing while other modes of payments like currencies are becoming popular. As of today, there almost 600 cryptocurrencies in the market. The leaders among these are Bitcoin, Ripple, and Ethereum. These cryptocurrencies are easy to make transactions with and can earn a high profit when invested.
Investment opportunities make it favorite among investors, and it paved the way in putting the blockchain technology in the limelight.
Indeed, there seems a bright future for blockchain cryptocurrencies. Now that the Bitcoin exchange has been gaining traction in the financial world, it is projected that there will be significant changes in ways payments are handled. With the combined innovation and digital advancement, cryptocurrency and blockchain will have a promising future.