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Blockchain is, as we know, a major disruptor in multiple industries. Whether you are new to blockchain or are already playing around in the field, blockchain technology and its applications are expanding, and it’s difficult to ignore. A frenzied market that swings wildly on a daily basis, critique about its future, and major moves from public investors mean that you need to get clued up if you want to participate in conversation, or in action. Missed the bus but want to know more? Read on and get the answers to the questions you might be too embarrassed to ask.
Image by Hitesh Choudhary
To explain blockchain, let’s start with Bitcoin. Blockchain and cryptocurrencies go hand in hand, as Bitcoin was the first application of blockchain technology.
Bitcoin was first introduced as a digital coin in 2009 by its mysterious creator known as “Satoshi Nakamoto”. The goal was to create a currency system, unlike traditional banking, that was transparent, secure and public. It is not owned or run by any banking authority or corporation, which means it is “decentralized”.
The blockchain system compromises of thousands of high-powered computers or Nodes that run a series of encrypted mathematical algorithms that command its operation. In the case of Bitcoin, the operation is a financial transaction.
As thousands of these transactions are taking place at any one time, they are then added to a network called a block. A blockchain is a group of these blocks that are linked together.
Each transaction has a public transaction key within the blockchain, allowing any transaction to be tracked to a sender and a receiver address or wallet. This makes blockchain verifiable because no part of the block can be falsified or tampered with.
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While Bitcoin is the OG, blockchain tech has meant that other forms of cryptocurrency have been created (and continue to be created). Together, they are collectively called altcoin. Mastercoin, Litecoin, Ripple and Ethereum are some of the more popular alternatives, though you get the wackier coins like Dogecoin and CryptoKitties who still manage to exist. At the end of the day, each have a different criteria of trade that use variations of blockchain technology.
The rise of the crypto trade exchange is the real game-changer, as this introduced a revolutionary new payment and investing system, based on the blockchain system, called ICO (Initial Coin Offering). Currently, a huge number of start-ups worldwide are being funded using ICOs.
Ethereum’s application of Smart Contracts, which function on white paper within the blockchain, created an authentication process not limited to trade, but to any criteria between two parties.
Smart Contracts are digitized on the blockchain and provide a level of transparency could impact fraud, not just at monetary, but at a voting, and societal level too, potentially helping to weed out corruption.
The global market for blockchain-related products and services is about $700 million and is projected to exceed $60 billion annually in 2024, according to Wintergreen Research. Among the big corporate blockchain players are Accenture, Facebook, Google, IBM and Microsoft. An interesting concern is that these companies are known as "centralized authorities." But the whole idea behind blockchain, proponents say, is to decentralize the authority that goes with controlling internet commerce and internet use in general rather than allowing centralized authorities profiting from acting as intermediaries.
Whatever your views on big business involvement, it’s easy to see how blockchain technology could revolutionize all industries as it becomes an industry of its own. An increase in demand for creating and generating ICOs indicates that there is a wealth opportunities, not just for blockchain developers, but for economics, markets, principles, business models, use cases and technologies the world over.