The blockchain technology has been very much around before the launch of the first cryptocurrency, bitcoin. However, the curiosity to find out about the bitcoin network brought many people to the knowledge of blockchain. So many other cryptocurrencies have been built since then, and there are over a thousand cryptocurrencies now. As trending as the news about cryptocurrency and blockchain is, there are still so many misconceptions about the relationship between the blockchain and the cryptocurrency network.
What is a cryptocurrency? Cryptocurrency is an online currency that has an equivalence to the regular cash. The cryptocurrency network is built on the blockchain technology to leverage the vast benefits the cryptocurrency provides. The first cryptocurrency, bitcoin, was developed to provide decentralized, quick, and private cash transactions. The slow speed and high charges associated with international cash transactions due to the central authorities it has to get approval from was the reason why the first cryptocurrency was built. However, thousands of cryptocurrency has been launched, and some offer other opportunities different from digital currency such as smart contract, DApp, and others.
What is Blockchain? The blockchain technology is a technology that works with open-source code and ensures decentralization. The open-source system of the blockchain technology allows the users to view details of records of transactions stored on the network without altering it. The technology protects records of transactions stored in the chain as blocks by storing pieces of transactions across nodes of different servers available on the network. Any alteration made to any of these transactions can easily be noticed by developers on the server, and this renders the record invalid. The utilization of the blockchain technology, however, surpasses just digital currency and protection of transactions.
?Does Blockchain need Cryptocurrency
The blockchain technology is independent and doesn’t need the cryptocurrency network to operate. The independency of the technology has been shown by the tremendous amount of money tech firms has injected into developing more blockchain-engineered projects. However, from another point of view, without the rapid height of popularity, the first cryptocurrency attained, the blockchain might still be in a box like it was initially left unutilized and unnoticed. Therefore, it can be said that the cryptocurrency network has created more awareness about the blockchain technology.
It is almost impossible to learn about the cryptocurrency network without first studying the base technology, blockchain. Both are currently interwoven since most of the characteristics the cryptocurrency network possesses was it was built on the blockchain technology.
A short video (5:59) brieflyexplaining what blockchain is.
?How the blockchain will change the world
The technology is one with great potential and provides huge investment benefits, these are some of the ways the blockchain technology will change the world:
Decentralization enables details of transactions to be stored across nodes of all servers. With decentralization, transactions can now be carried out faster, with fewer charges, and with more privacy.
The finance world can benefit from the security system the blockchain technology offers. Take accounting and auditing as an example, since details of transactions are readily kept on the network and cannot be altered, it makes accounting a lot easier. Also, details of transactions can quickly be recovered unaltered; this will enable faster auditing services.
- Smart contracts
The smart contract allows transactions between two parties to be carried out in a modern and better style. A smart contract works with an agreed term between parties involved in the contract; hence, the final payment will only be made when all details of the agreement have been reached.