New innovations are slowly but increasingly finding their way into every part of our lives. The business sector is no different, and it is gradually being digitalized. Blockchain technology is one of the cutting-edge technological techniques used by businesses. Initially, Satoshi Nakamoto (pseudonym for a person or group of people) founded bitcoin in 2009, and blockchain became the central infrastructure of bitcoin in 2009. After a few years, blockchain became self-contained, leaving a humongous impact on businesses like internet banking, insurance, law, and logistics, among many others. Despite the fact that Bitcoin is the most well-known cryptocurrency and the one with which blockchain technology was created, cryptocurrency is a method of financing that employs cryptographic techniques to track the output of monetary units and verify the transfer of funds. Blockchain, on the other hand, is a peer-to-peer network that stores a digital archive of all transactions.
Today, both blockchain and cryptocurrencies are transforming nearly every sort of service industry, rapidly seizing the momentum this technology can offer. The strongest feature of the technology is that data inserted into the network cannot be removed or altered by a single user without displaying the changes to other owners. You cannot hide any operations and all adjustments that are made become irreversible. Because of these characteristics, blockchain is being rated as the most important method for sharing data and preserving knowledge in lieu of cryptocurrency and bitcoin.
Cryptocurrency, Bitcoin, Blockchain - Are they related?
Simply put, the answer is a clear majority NO, as these terms only sound familiar, but they are not equivalent.
Cryptocurrency is a form of digital currency in which cryptographic techniques are used to track and validate the creation of currency units. Bitcoin is a kind of cryptocurrency that uses cryptography but is not backed by some authority. While Blockchain is a technology that facilitates Bitcoin transactions, it is not the same as Bitcoin. It helps Bitcoin and other cryptocurrencies to survive and function with no need for a centralized authority.
How does Blockchain Technology work?
- STEP 1 - A transaction is demanded by someone. This can incorporate cryptocurrency, documentation, or other materials.
- STEP 2 - Transaction transmitted to P2P networks (nodes).
- STEP 3 - Prospectors verify the transaction using well-known algorithms & transactions combine to form a data block.
- STEP 4 - The new block is then added to the existing blockchain.
- STEP 5 - The transaction is complete that is both lasting and irreversible.
Now, let's determine the Blockchain versions.
Blockchain 1.0 CURRENCY - This is a rip-off of Bitcoin technology, which helps people to anonymously store & share digital currencies.
Blockchain 2.0 SMART CONTRACTS - This advances the idea of a smart contract, which allows people to perform internet transactions without the intervention of a third party.
Blockchain 3.0 dApps - This makes use of the capabilities of the two previous blockchain versions to build decentralized apps (dApps).
Blockchain is without a doubt a game-changing innovation for the world's major companies. A vast number of companies are currently implementing and using blockchain technology. This technology helps individuals to verify transactions without the need for a central clearing authority.
Let's take a quick look at how numerous businesses are using blockchain to their advantage.
Any industry that wants to use blockchain technology must first do a business analysis to see if it is a good fit for their value proposition. Now that you recognize the value of blockchain technology, you can make an informed decision about whether or not to use it.
