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If the first thing that comes to mind when you think about blockchains is cryptocurrency, you’re not alone. With the daily churn about Bitcoin, it’s no wonder that we associate it with blockchains exclusively and have difficulties understanding what it actually is about. Why is everyone talking about it and how is it really changing the way we think about assets?
Here is a straightforward guide to understanding the concept and applying it to other things than mere cryptocurrency. It may not make you a Bitcoin millionaire or even a cryptocurrency miner quite yet, but it will help you to join in on the semi-intellectual conversations around the dinner table. That way, you’ll be able to stay up to date on all the changes presented by the Internet – and even take advantage of them, if you can.
The basics: Decentralization
The idea may seem complicated but it is actually quite simple and even natural when you first wrap your head around it. The block of blockchains is just a record of a new transaction, such as the location of cryptocurrency or even voting records, which is added to a chain. With multiple of these blocks in a chain, we have, of course, a blockchain. Pretty simple so far, right?
In order to process these transactions, we need to have a look at the miners. Not the ones with a pick and a colander, but modern-day miners with a computer. Because it is encrypted, the miners need to solve mathematical problems in order to process the transaction which becomes increasingly complicated as the blockchain grows. When it is solved, they get rewarded in cryptocurrency.
So what is cryptocurrency in any way?
If you’re the happy owner of cryptocurrency, you’re actually possessing a private key to access it on this blockchain. In addition to this private key that you have to mine your way to, each account will also have a public key which allows people to send cryptocurrency to your account. So far, so good – yet, while you may use the private key to withdraw currency to spend, you cannot access it again if you lose this key.
Because blockchains are decentralized, the withdraws you make will be instantly visible to everyone – unlike a bank transaction where the bank first needs to update the records before you and the third party can see it. That’s what makes the concept to transparent and revolutionary; it doesn’t rely on a single server or computer to function as it is shared by everyone.
Every transaction you or somebody else makes will be visible to everyone on that blockchain. They may not be able to see you or your friend’s name, but they will still be able to see the information about the currency and how much you transferred to one another.
Why not just use regular banking?
Many people see this as an alternative to traditional banking as you skip the middle-man, or the bank, and you don’t have to wait for it to verify the transaction. It’s the kind of liberating public system that empowers the citizens and gives them back the control.
Just like the public needed to rely on the big corporations that owned newspapers and radio back in the days, the Internet has made it possible for anyone to post their own news articles, launch their own podcasts and access alternative news at all hours of the day.
Sure, it makes the news landscape a bit more confusing and we have to learn how to weed out the fake news from the real news, but still – citizens are able to regain control and spread information on their own terms. Anyone can be a journalist today and, with so many new digital platforms, the audience needs to learn how to use this newfound power wisely.
Where the Internet has already made information freely accessible to anyone with an Internet connection, you can think about blockchains the same way – just instead of information, it’s focused on money. Assets may be shared in ways we could never imagine before and, subsequently, gain from the shared economy boost. Everyone has been given a voice, in other words, and an opportunity to bypass both banks and governments in one swift transaction.
So blockchain is not just about cryptocurrency?
No, although it’s easy to see why most people associate it with the likes of Bitcoin. It is, after all, the first widely known uses of this kind of blockchain technology. Now that you understand the basic concept of it, you may also come to realize all the potential around it – everything that can be shared and bypassed where we’d normally have to go through the tediousness of bureaucracy and banks.
Today, blockchain is really revolutionizing almost every industry. Have a look at IHTCoin.com, for example, to read more about how the Internet and blockchain can be fused with the real estate industry so that anyone can take part in real estate transactions through digital currency. It makes the process transparent and enables assets to be accessed instantly within the asset cloud where it’s able to provide liquidity to its investors.
Considering how this shifts the power in society, the concept is quite revolutionary. There are numerous other companies that also try to utilize blockchains to their as well as their users’ advantage. Take the entertainment industry, for example, where KickCity.io has made it possible for event organizers to only pay for what they’re getting – and even rewards community members by sharing those events. With more than 70k users and 300 events hosts, it’s clear that this platform is generating more than enough money.
The more you learn about the Internet, the sooner you’ll come to realize its vast potential. Although the entire world isn’t online quite yet, it still provides us with a flat structure and the kind of grassroots-power we’ve been idolizing long before the French revolution. It’s the Internet revolution, perhaps, and its abstract ways are implementing real changes in our everyday lives.