You need to know about blockchain

in #stach4 years ago

Bitcoin is a decentralised cryptocurrency invented by Satoshi Nakamoto and released as an open source software in 2009, is mainly used as a peer to peer payment. These transactions are verified by the network nodes and for solving this complex problem its connected computer system has to do solve highly complex cryptographic problems which are called as mining, for a successful mining respected miner(the computer which solves the problem at first) get a small amount of bitcoin as fee.

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Now let’s see what are the advantages and disadvantages of this new age currency.

Pros:

  1. We don’t have to depend on the traditional payment system which is unreliable, old fashioned.

  2. It can instantly transfer the money with the very low transaction fee.

  3. It has the ability to make our planet a real global village.

Cons:

People are misusing it for anonymous fund transfer(mainly used for the drug purchase, bribe, and other illegal things).

  1. One can lose his money if lost the key.

  2. No centralized authority to monitor its authenticity.

Let’s dive deeper to understand about this intangible currency which is trying to solve some of the real world problems. As we know that printing money is itself is a complex math and there are huge ifs and buts are associated with it like whether the govt. has enough amounts of gold in reserve or not, does the govt. is manipulating the currency or not etc. Frankly speaking if the govt. and the other financial institutions are so smart then why does the ‘The financial crisis of 2007–08’, ‘The Asian crisis 1997 ’ happened? Most of us know the answer that our present financial system has become too old and too corrupted which is basically making money out of thin air.

Now coming to other question how it can help the traditional system to get its reputation back and how come it makes transactions faster? Bitcoin tx. runs on the the blockchain technology which captures the transaction records in blocks, these blocks are secured, linked and each computer stores the transaction details of all the nodes which not only makes our system faster but also it indeed makes the system more secure as it’s practically impossible to remove transaction details from every computer. I have already informed you about for helping the transaction successful the miner get some fee as bitcoin so people will try to solve the problem as early as possible as they can able to earn more money so it will indeed help to reduce the transaction time.

Coming to the second pros, it can transfer money instantly with very low fee, as we know that transferring money from one place to another place is time consuming especially for the case for of international transactions but with the help of Bitcoin transaction we can instantly do it though now the cost of bitcoin transaction is too high which is not suitable for the micro transactions but with the help of latest technology(Bitcoin’s lightning network) and the hardfork the problem can b resolved. For getting faster and secure transactions in comparision with the bitcoin transaction we can use other types of technology such as ripple(xrp).

Now lets see how bitcoin is helping us to become a global citizen. In most of financial conferences every time we used to hear that we are living in a global village but in the real world we don’t feel so, as from country to country the currency differs which a huge headache as at the time of converting the currency, it will not only loss of some of its value but its time-consuming too. But if we can use the cryptocurrency then this problem can be easily resolved. How? You can buy a bitcoin or any other cryptocurrency in one country and in the other country you can easily exchange it for buying any product or service. In this process one not only able to save the loss that may happen due to currency exchange but also it save the time too which in turn helps businesses to grow more faster and in efficient way.

Every coin has two sides so as bitcoin too, so now lets see whats the disadvantages of the bitcoin. As we know that bitcoin is a currency which is anonymous in nature so people are using it for the anonymous transactions which is true which causes a huge dent in our system. But can you please tell me with the help of present currency system the anonymous transactions are happening or not? If yes then what’s wrong with the bitcoin. Most of the cryptocurrencies re at least traceable.

As we know that bitcoin is decentralised, so we don’t have to depend on the integrity of any person or any govt.. If you want to know whether it’s good or bad then just ask yourself why every time you have to depend on a process which is filled with huge flaws such as in case of the fiscal stimulus most of the benefit used to go with the big boys which indeed doesn’t seem to be fruitful but yet the present financial system used to support it. And must read how the present financial system is making money out of thin air, lets say if you save Rs. 100 in a bank account then in the present economic system the bank will print Rs. 1000 out of it. So, if we want our system more trustworthy then taking the help of technology is not a bad idea.

Actually rather than focusing only on the bitcoin we must focus on the blockchain technology too which is very capable to solve real-world problems that I already discussed and ability to do much more due to its adaptive nature. As we already understood that bitcoin is basically a currency which is generated on the basis of the blockchain tx. and its finite, no one can able to generate it as per their wish/need. So, the chances of devaluation is very less(its value can only be devaluated if the usage of the blockchain decreases).

So lets see whether you should buy the bitcoin or not?

To make you understand how this things exactly works . I’m taking the help of one technology Co. Google. it is helping us to solve the real world problems with the help of its products and services and by using it we are able to overcome our problems. So, as blockchain is doing the same thing, it’s helping us to solve problems by offering the platform.

Now see how Google is making money, when we are using any of the google’s product or service then google is making revenue and out of it they are making profit (which helps google share price to get better price as the valuation of the co. increases). So as when the blockchain will be used by more people then the price of the bitcoin will also increase, as the valution of the blockchain will increase. Consider the Bitcoin is the share of blockchain which just reflects the valuation of the blockchain. So if the usage of the blockchain increase then the price of the bitcoin will also go upwards or in the negative scenario, it can go down too.

Now some people can tell that it’s is overpriced, it may be or may not be, the price is the outcome of complex factors such as supply, demand, public sentiment etc. Though looking at its potential what we can say that there is a huge scope for implementation of the blockchain so its going to be used more as a result the chances of getting better valuation is possible.

In the past due to huge upsurge in its price, people are trying to make big buck in less time which directs the volatility in the higher zone as but in coming days hopefully the price volatility will be lesser as they will understand that the price of bitcoin is as important as the blockchain, the crucial thing is the technology and the adoption of the currency scalability, security, authenticity and the ease of use matters. If all these things are fulfilled then the demand of blockchain will increase which will give a big boost to the bitcoin price.

Though I would like to say that blockchain is cryptocurrency v1.0, ethereum is cryptocurrency v2.0 and IOTA and Cardano is the latest one.

As we know that technology is an ever changing field so the version may change with the betterment of new technology but the sole moto will be the same and the people will also try to bet on newer things on the hope of getting a good buck out of that.

So, if you want to come to a conclusion then you must understand the technology and its benefit. if you feel that it’s capable to solve the real world problems efficiently, securely and it has the adaptive nture than the present system then you can invest in it. My personal suggestion is invest your time in building the knowledge about blockchain as it can help you to become wealthy rather than rich.