Steemit Crypto Academy Contest / S6W1 - The Blockchain Revolution
Hello everyone! This is @aniqamashkoor from Pakistan. I am hale and hearty here and wish that you people will also be In the best of your health.
Steemit crypto academy has always brought interesting topics to educate us in better ways. I am writing to mark my entry for the season 6 week 1 topic, Blockchain Revolution.
Image prepared at canva
Explain in your own words how cryptocurrencies have brought a revolution to the digital economy.
Now in this advanced era, it is not hidden from anyone that cryptocurrency is a digital currency we cannot find it in physical form. It can be transferred or operated by using digital means like computer networks. Cryptocurrencies are of two types centralized and decentralized. They have brought a huge revolution in the digital economy it has boosted our economical activities which include smooth transactions. It has provided a platform for many people to grow financially and increase their income by investing wisely.
Because of transparency and automation, they may be tracked in a ledger and it has entertained the people in a good manner and the economy is growing faster around cryptocurrencies. Other than these factors one of the leading reasons is that it has boosted entrepreneurship, these currencies have opened more doors toward the different modes of receiving money. Cryptocurrencies are creating a huge difference in terms of business and this is equally speeding up our economical growth in the digital market.
How is cryptocurrency a revolution, and what technology is used to run the cryptocurrency process?
Cryptocurrencies are one of the most revolutionary things that hit the world significantly. The creation of blockchain for all the participants involved by using peer-to-peer networking has brought about a virtual touch to this economy. These digital tokens have compelled different banks around the world to accept their existence that banks have accepted large payments in terms of cryptocurrencies.
The existence of cryptocurrencies is based on blockchain technology. Blockchain can be considered a whole new form of the internet for these currencies. It is a decentralized ledger that keeps a record of all transactions. The purpose is to make transactions secure between two individuals without revealing their identities. No third-party verification is required for transactions.
What is the main purpose of blockchain technology, and can this technology work without an internet?
The core purpose of blockchain is to ensure a secure transaction that can not be edited or altered by any source. It ensures traceability and since it is a digital forum so definitely they are cost saving and do not need any third person or paperwork to verify the transactions. All the transactions made by using blockchain can be viewed live.
Blockchain provides digital transactions so blockchain uses the internet for successful transactions. Once the transaction is made there is no need for the internet. Besides this for private blockchains connectivity with the internet is not important because they operate on their own internal networks. For a decentralized blockchain, the internet is important.
Explain in your own words how blockchains generate cryptocurrency. Is all cryptocurrency based on the blockchain? Explain
A mining process is used by blockchains to generate cryptocurrencies. It is a digital ledger and immutable in nature which means it records transactions but cannot reverse or edit them. Another thing is PoW proof of work, which this algorithm uses for the generation of coins. Complex mathematical problems are solved by computer by securing the network.
The majority of cryptocurrency uses blockchains for example bitcoin and Ethereum. But blockchain is just a type of distributed ledger technology And there exist few other currencies that can operate without blockchain. Tangle is being used as a ledger for IOTA. which concludes that not all cryptocurrencies are based on blockchains.
Explain some of the challenges faced when implementing blockchain technology.
With so many attractions blockchains has also some challenges upon implementation.
Low Scalability: Blockchains are best for less number of users but as the number of users increases it takes a lot of time for the system to complete transactions and because of this its performance is compromised over the number of participants.
Regulation Issues: Blockchain technology is still not acceptable to many countries because of its less effective regulations. There is uncertainty about this technology which creates a barrier for stakeholders.
Lack of security: upon wallet creation it provides keys that can access all the data. This has resulted in weak points. It the keys are stolen all the data and finance can be accessed by the hacker or if by chance the keys are lost the wallet is gone forever.
Lack of knowledge: One of the challenges that occur for the implementations of blockchain is lack of knowledge. It has a lot of complexities that make it difficult to understand. One has to go through its encryption principles and ledger distribution to have command over this technology.
There are other challenges too and it will take time for this technology to fully revolutionalized the economy. A lot of advancements in many different sectors of this technology can be made to make it a successful one.
Thus cryptocurrencies have brought about a remarkable revolution in the economy because of their decentralized nature it's making a prominent space in this economy. It's not dependent on any Person or any other involvement and the services cant be exploited like other financial systems.
Blockchain technology has added value to this economy because of its security benefits, transparency nature, and irreversible factors. As the use of this digital money is increasing and spreading around the world blockchain technology has gained a stronger grip.
People have known this technology for a long time and its application is not limited to cryptos only. Blockchains can be applied for other business purposes also.
Hope so you people had a good read. Take care!