What Is Cryptocurrency And Blockchain Technology?

Cryptocurrencies are in the recent times enjoying an increase in popularity amongst several business partners as people are now selling great items in almost every domain. Cryptocurrency trading is gradually becoming a famous alternative of earning higher profits and substantial money on the online platform. As such, the world is observing a great hype about the terms like “cryptocurrency”, Blockchain technology”, “Bitcoin”, and various other relative terms. Some of these serve to be important forces in the financial industry. If you wish to learn more about cryptocurrency and the Blockchain technology, then read this article. Here, we unveil everything that you would like to know about these trending financial drivers.

Cryptocurrency And Blockchain Technology Explained 

What is the Blockchain Technology?

As the society is becoming increasingly digital, more financial service providers are striving towards offering their customers high-end services to which they would be accustomed, but in a more secure, effective and cost-effective manner.

Here is where the concept of Blockchain technology comes in. The origin of the Blockchain technology is considered to be a bit indefinite. An individual or a group of individuals which were known by the name as Satoshi Nakomoto have been known to invent and release the technology in the year 2009. This was invented to serve as a way of digitally and anonymously sending payments between different parties without having the need of any third party for verifying the transaction. The Blockchain technology had been initially introduced for the purpose of facilitating, authorizing and logging the transfer of cryptocurrencies like bitcoins and altcoins.

How does the Blockchain Technology Work?

The working of Blockchain technology is relatively simpler. It is really easy to understand its working at the core. Basically, Blockchain technology serves as a shared database that remains populated with several entries that should be encrypted and confirmed. You can assume this technology as some kind of heavily encrypted as well as a verified shared document on Google wherein each & every entry in the given sheet would be depending on the logical relationship with all the given predecessors. The Blockchain technology aims at offering a highly secure & efficient way of creating a log of confidential & sensitive transactions which tends to be tamper-proof. The secure transactions could be anything from records of some shareholder to international money transfers.

The overall conceptual framework of the Blockchain technology along with its underlying code serves highly useful for several financial transactions. This is because it has the potential of giving the different companies a digital and secure alternative to different banking processes that tend to be typically time-consuming, bureaucratic, expensive, and paper heavy.

What are Cryptocurrencies?

The term “cryptocurrencies” is usually used for denoting digital money. Cryptocurrencies serve as the digital means of exchange or financial transactions that make use of the concept of cryptography and the advanced Blockchain technology for facilitating secure as well as anonymous financial transactions. Since the time of the inception of the cryptocurrencies, there have been several types of iterations in them over the passage of time. However, amongst all the major changes, Bitcoin has been successful in truly thrusting the cryptocurrencies & its legacy forward during the time of the late 2000s. There are several types of cryptocurrencies that are floating around in the trading markets in the current scenario. However, amongst all of them, Bitcoin has been the most popular option until now.

How does Mining of Cryptocurrencies Occur?

The different types of cryptocurrencies including Bitcoin, Ether, Litecoin, and various others simply do not fall from the sky. Just like any other form of monetary units or money, these digital forms of currency are also produced and it takes a considerable amount of time to produce the same. The process of producing the cryptocurrencies is referred to as “digital mining”.

Satoshi Nakamoto who was the founder & inventor of Bitcoin had claimed that there would be only 21 million Bitcoins in existence ever. He & his group had reached this exact figure by doing the calculations about the fact that people would be discovering or mining a particular number of digital coins or blocks of financial transactions on a daily basis.

In the duration of every 4 years, the total number of the cryptocurrency Bitcoin gets released with respect to the previous transaction cycle getting reduced by as much as 50 percent, in addition to the specific rewards given to the miners for unveiling the new set of digital blocks. In the present scenario, the reward is around 12.5 bitcoins. As such, the total number of the cryptocurrency Bitcoin that will be in circulation will be approaching 21 million. However, it never actually reaches the exact figure. This implies that Bitcoin will never be experiencing any kind of inflation. The only downside that remains is that any kind of cyber attack or hacking activity might serve as a big-time disaster. This is because it might erase or delete the entire Bitcoin wallets with no to little hope of getting back the desired value. But its actually not possible to hack a crypto transaction without the help of transacting people on both ends. I’ll explain why in another article.

As far as mining of the bitcoins & other cryptocurrencies is concerned, the mining process usually requires electrical energy. The cryptocurrency miners have to solve complex mathematical computations, and thus, the reward tends to be more of bitcoins being generated and being awarded to the miners. The miners are also responsible for verifying various financial transactions and preventing any kinds of fraudulent activities. Therefore, the number of miners represent faster, highly reliable, and increasingly secure financial transactions.

Blockchain and Crypto is the Future. No doubt about it.

Since the inception, the cryptocurrency Bitcoin has served to be highly volatile. However, with the recent studies and its latest boom, it has been assumed that it will be hitting the mark of $500,000 by the year 2030. As such, the overall prospect of having the share of Bitcoin in cryptocurrency trading is becoming more lucrative with every passing time. Even the Blockchain technology is expected to rise in its range of applications by addressing specific problems, improving workflows, and reducing the overall costs – which could be the ultimate goals of any IoT application project.