Blockchain and cryptocurrency are a few of the most lucrative terms in the market today. But, what do we mean by these terms, and how they are going to shape up the future is going to be the most exciting things to see.
But to understand these things, we have to dig deeper into these topics.
Blockchain
According to IBM, Blockchain is a decentralized, unchangeable ledger that makes recording transactions and managing assets in a corporate network much easier. On a blockchain network, virtually anything of value may be not only recorded and traded, but it also lowers the risk and cuts down costs for all parties involved.
How is Blockchain going to affect the future?
Each and every business that runs globally has to leverage the power of information. The quality, accuracy, and speed at which information is transferred determine the success that a business will achieve. A blockchain is an ideal option that facilitates the flow of information and provides swift, decentralized, and completely transparent information stored on a ledger that is immutable. The network members who are permitted are the only ones who can access the data. Everything ranging from orders, accounts, payments, production, etc can be tracked by a blockchain network. All the information and transactions that happen through the blockchain network are end-to-end encrypted that provides not only greater confidence, but also adds new efficiencies and opportunities.
Blockchain is the foundation for various major cryptocurrencies such as Bitcoin
The Federal Reserve holds the U.S. dollar. A user's information and their money are technically at the mercy of their bank or gov. under this central authority structure. If a user's bank is hacked, their private information can be leaked, ultimately creating a huge loss.
Blockchain allows Bitcoin and various other cryptocurrencies to operate without the need for any central authority as it distributes its operations over a network of computers. This not only reduces risk but also eliminates a lot of the transaction and processing fees.
According to projections, global blockchain technology revenues will skyrocket in the next few years, with the market estimated to reach over 39 billion dollars by 2025. The financial sector has become one of the fastest-growing sectors in blockchain technology, accounting for more than 60 percent of the market capitalization technology.
Therefore, acceptance of blockchain technology at global platforms might become one of the most common practices.
Cryptocurrency
“Cryptocurrency” is a combination of two words “Crypto” and “Currency”. Crypto is short of “Cryptography” which is an encryption technique used in order to secure a network. It is a type of digital asset that is based on a network that spans a huge number of computers. Cryptocurrencies are able to exist outside of the control of governments and central authorities because of their decentralized structure.
The first-ever cryptocurrency was Bitcoin ( launched in 2009). As of August 2021, over 18.8M bitcoins were in circulation with an $858.9 billion in total market cap.
Cryptocurrencies constantly face criticisms due to their use in illegal activities, exchange rate volatility, and the shortcomings of infrastructures that create their foundations. But, on the other hand, they have also gained wide acceptability due to their portability, inflation resistance, divisibility, and transparency.
According to Statista, there are almost 6,000 digital coins in use as of 2021, up from just a few dozen in 2013. However, a considerable fraction of these cryptocurrencies is insignificant. It is quite simple to create a coin due to how transparent the development procedure is. Thus, only the top 20 cryptocurrencies are thought to account for nearly 90% of the whole market.
Future of cryptocurrencies
There is a tremendous amount of attention that is being paid to cryptocurrencies in 2021. Global giants like Tesla and Paypal are also taking great interest in Bitcoin and other cryptocurrencies to fulfill various requirements.
According to Dave Abner who is the head of global development at Gemini, a well-known cryptocurrency exchange, the first half of 2021 was a "breakthrough" in many aspects.
The evolution of Blockchain and cryptocurrencies has revolutionized the modern world due to the efficiency and security of the information. The world has seen a significant rise in acceptability rates for cryptocurrencies and there is a huge amount of investment made globally in these technologies and their future.
But, being a speculative investment, individuals might consider few precautions before entering into the world of cryptocurrency and blockchains and more importantly, understand these terms in a deep manner.
