TheBitcoin and The Blockchain
What is the Bitcoin Blockchain? Is it called the bitcoins? What is it used for? These are only some of the questions that are being asked by people all over the world. The more you continue to read about it the more you will get to know about it.
The surprising thing is that even though many individuals are making big money from it and despite the ongoing political debates, they still are confused between both. It’s pertinent to note here that bitcoins is the very first ever application of this revolutionary technology that emerged in 2021, which dramatically rose to public attention then. It is a sort of digital cash that is being made use of right now by those individuals who are practicing ‘digital cash trading’. They are basically making transactions without having to carry around with physical currency or dealing with the hassle of dealing with government tax laws.
What is so interesting about this technology is how it works? Basically, what happens here is that certain group of individuals decides to develop a kind of computing platform that can be accessed by anyone who has a valid digital signature for it. This group calls this platform’Bitcoin’ and then starts the process of developing the software that allows people to make secure and confidential transactions and then start mining. The miners are the people who actually secure the network and continue to maintain it so that everyone can access it. What happens is that every time a transaction is processed, a transaction fee is charged onto the customers account based on the specific rate that the person is requesting.
So, what is happening in the background? Well, since the late nineteen seventies up until the early nineteen eighties, when the first bitcoins were being mined, there have been a lot of progress and major advancements regarding this technology. The most notable was the launch of the peer-to-peer digital cash networks called the Electronic Money system or the P2P network. This paved the way for digital secure transactions that are fast, safe, and almost free. During this period, people actually referred to this as bitcoins or bitbanks.
Today, you would probably be asking, what is the use of bitcoins if there are currencies already out there? Well, consider for a second how the world worked back then. The traditional monetary systems of the past usually worked by allowing one currency to gain an edge over other currencies. For instance, the United States dollar was thought to be stronger than any other currency in the world at the time and was considered to be the ideal currency to use since it was strong, light, and had no central government backing it. On the other hand, gold and silver were thought to be the perfect hedge against inflation since they are precious metals that are highly valued and have their own intrinsic value.
One of the major criticisms against bitcoins was its extreme popularity among online criminals. Some would say that with so many thefts, it proves that digital currencies like bitcoins should not be used for normal everyday transactions. However, there are also a number of burglars who did not manage to steal the money they needed to rob a bank, because the owners of those wallets put a limit on the number of transactions allowed every day. This also prevented these criminals from spending all their money in a short span of time. To prevent this kind of crime, people started transferring their bitcoins to banks so that if there was a burglary, the owners of the bitcoins could still have their money even if they were abroad.
Another criticism against bitcoins revolves around security holes created by the previous system, namely the peer-to-peer system. In this system, a person had to trust every single transaction that goes through the network, because no one can really keep track of everybody’s every transaction. Even with the most secure system, a hacker or group of hackers could still infiltrate your computer and get access to your account information. Also, since no official body was running the bitcoin exchange, everybody just blindly trusted every single transaction that goes through the network.
The best thing about the Bitcoin and the Blockchain is that it brought a level playing field to people who want to start an online business or transactional business without having to wait months or years to get an approval from a large financial institution. With the Bitcoin and the Blockchain, anyone can start making transactions immediately, and with minimal upfront costs and high speed transfer of funds. Transactions are mostly cheap, and they are fast. All in all, the Blockchain is a technology that is slowly evolving, and it is up to the users of the protocol to keep up with the changes and make the protocol as secure as possible.