Mechanism of blockchain technology behind cryptocurrencies

Mechanism of blockchain technology behind cryptocurrencies

Previous blockchain blogpost:

In the real estate blockchain enables to store authentic online documents, draw digital smart contracts, and keeps the identities of the parties anonymous. While all sounds great, for everything to work seamlessly, it still needs a lot of things. As traders and investors have bid up Bitcoin’s price higher and higher, the Securities and Exchange Commission has suspended trading of some firms. Investors need to be cautious and not chase small companies that are trying to ride the wave.

These days Bitcoin, the most famous and the most substantial cryptocurrency, is always in the news. The technique called Blockchain, which is a database at its heart, serves as its public ledger. The blockchain technology sits on different devices and servers around the world. The blockchain is the operational system behind not only Bitcoin but also other cryptocurrencies. For example, Ethereum, the second-most famous cryptocurrency after Bitcoin, runs on a unique protocol using blockchain. Ethereum not only does currency but also allows programs and platforms to run on top. Firms such as ConsenSys has partnered with Microsoft to work on Ethereum applications. As the organizations that utilize it increases, blockchain technology will be ubiquitous.

Company applications abound

Blockchain

Blockchain

The potential applications of blockchain in any field or industry abound because it is ideal for currency. To cash in on this trend, startups in this realm have swollen dramatically in just a few months. Some firms have even boosted their assets and sales by professing links to the blockchain. Banks across the globe are making inquiries as to how to start their blockchains. There will be many marketing companies that would operate entirely on this technology and sell products through blockchain.

Fundamentals of blockchain

Blockchain

Blockchain

There may not be a need for every company in the world to focus on such bleeding edge technologies as blockchain. However, those who are appealing to younger and early adopters should be learning about blockchain. A basic grasp of how important it is and how it works will prove to be sufficient for now. In the future, this knowledge would hardly be enough, as the technology will be recording all digital information. The bigger question is how to start, and the answer is first to have a better understanding of the fundamentals of the blockchain.

Mechanism of transactions

The term transaction could be misleading as people think of it as exchanging currency between users. But in this context, it means a piece of information recorded by a miner to the blockchain. Miners are users with equipment and software to verify transactions or to build them into blocks.

Type of transactions

Most transactions are financial right now, for example, a Bitcoin tip to a musician from a fan. However, it could also include data, or a song upload, or a message that can be digitized. Other non-financial transactions and smart contracts such as keeping track of music license payouts, recording marriages, or issuing birth certificatescan also run on the blockchain.

Ten minutes transactions

All the recent operations in the past ten minutes are written to a new block and, like a chain, linked back to the old one. It is close to impossible to change anything because of the transaction’s duplicate nature. Also, it is a secure system as they are time stamped, encrypted, and verified by multiple users.

Hash links blocks

The mathematical procedure of assigning a value to complex data is known as a hash. A simple instance and a practical one would be numbering a list of names or places. Hashing is the process that links blocks together, and a faster miner completes more hashes per second. The system incentivizes these actions, which means whoever finishes the task first is entitled to a prize.

Inevitable mass adoption

While public awareness is a bit harder to track, cryptocurrency has quickly gone from a niche term to a common financial phrase. Every day, new press items inform people about how they can partake in this invention. An advantage of the daily media coverage is public awareness and education about what blockchain is, how they should evaluate cryptocurrency and what it can do. Only education and outreach can train people to look for possibilities in the industry because this is a new frontier in which many people find weaknesses.

Blockchain

Blockchain

As people become more comfortable and familiar with the crypto industry, their odds of participating increase. The good news is that the general understanding is rising rapidly, and there has been a shift in society in the recent past. With the growth of the industry, it is possible to establish the model for cryptocurrency and to reach the milestone of mass adoption. Some poignant trends and entrepreneurial practices are already pointing in this direction.

Launch new cryptocurrencies

There have been some initial coin offerings, which launch new cryptocurrencies. They have also ushered in a trendy wave of features and structures for the networks. These new offerings are more consumer-friendly than all other earlier adaptations. Whether this transition is for more specific functionality network or merely trying to set it up for optimal user experience, it is necessary for mass-market. For now, the coin offering market is surging and is the next significant chapter that is being embraced even by traditional investors.

Decentralised gaming ecosystem

The Game Protocol is a promising and upcoming initial coin offering for a decentralized gaming ecosystem. It is a platform for developers to create and advertise games on the blockchain. It will also provide developers with the necessary tools to distribute their work while allowing game creators to raise funds to implement them. This process eliminates the biases within other fundraising platforms and centralized marketplaces.

Digital blockchain purse

An upcoming initial coin offering is the Divi Project that is aiming to build an intuitive smart wallet and is also tackling the issue of gender-divide prevalent within the crypto industry. Sadly, women currently make up only 5-7% of the total cryptosystem users in the world. Divi is changing this by creating an ecosystem that is appealing to women. Their innovations would allow the average person who has no familiarity with code or technology to enter this space confidently.

Interconnected blockchain applications

Bitcoin may be the money of the Internet, but its successors will build interconnected blockchains running countless applications. Building bonds between blockchains would enable users to flow smoothly from Dash to Bitcoin to Zcash to Ethereum, strengthening the entire ecosystem.It is a revolutionary concept because it provides a system of data transmission and independent verification that does not rely on financial institutions or government. Even if it eventually fails, Blockchain, the technology behind it, is here to stay and could very well change the Internet.

Coming up next:

Cryptocurrency is a digital payment. A network of computers that uses cryptography to authenticate transactions maintains it. Depending on how investors expect to make money and how they are structured, some cryptocurrencies may count as securities. If traders of these currencies prop up the price and go online to spread gossips, that might count as fraud. It can be hard to determine if a bubble exists. The only way to ensure that they avoid a burst is mass adoption.

Creation of value through blockchain technology

Creation of value through blockchain technology

Previous blockchain blogpost:

We are experiencing a significant shift in the real estate industry, as more and more people are engaging in property transactions using Bitcoin. Many industry experts are excited about the potential for digital money and the blockchain technology when it comes to real estate. But although digital currency transaction is the future, industry insiders say that we are not quite there as yet. Digital money analysts are less convinced that the property market would more widely adopt the cryptocurrency.

Creation of value through blockchain technology

The blockchain is the culmination of all the platforms such as Napster, Skype, and BitTorrent that operate on peer-to-peer networks. It is the infrastructure of the digital currency and is described as an open, shared, and distributed ledger. A process known as cryptography creates digital currencies and additional units of them. It also verifies the transfer of assets and secures the cryptocurrency transactions in the blockchain.

Global peer network

The blockchain is a network that verifies every transaction, which then becomes a new block of data. Blocks are nothing but lists of linked records that keep growing continuously. When this data gets added to the blockchain, the recorded value is available to all the users of the network. This revolutionary technology is maintained simultaneously across millions of computers without any central data storage. In short, blockchain is a spreadsheet that can record verifiable transactions efficiently and permanently.

Value exchange network

Fans and advocates of the technology hail it as an efficient global network of value exchange. A very high level of security within the blockchain technology leaves no room for failure. Part of the efficiency is because of its ability to generate value for the community of keepers. In the real estate industry blockchain enables to store authentic online documents, draw digital smart contracts, and keeps the identities of the parties anonymous.

Authentic online documents

While accepting digital payments in real estate transactions is new, this cannot change the status quo. It can only change if the government used blockchain to store all the data of the industry there. If blockchain can facilitate moving land records to an immutable online ledger, no one could go back and manufacture records out of thin air. A huge benefit of such an initiative would be fraud prevention, which amounts to someone producing false paper documents that look authentic.

Digital smart contracts

If verified and quality data about potential buyers and properties were available on the blockchain, it is possible to draw intelligent treaties. These are legal agreements written in computer code with programmed rules to direct the flows of money. No more sit-downs between escrow agents, lawyers, and brokers to review paper documents. The system would have it all and would run smoothly and quickly, provided the data regarding properties and people in the blockchain is accurate.

Parties remain anonymous

Cryptocurrency payments offer anonymity because they are digital that in some cases require just an email address to acquire them. Blockchain could protect the buyer’s anonymity by allowing interested parties to ask questions without revealing who the person behind it was. The fact that the owners can also remain anonymous is a significant appeal to some in the luxury real estate market.

Bottlenecks of implementation

While all sounds great on paper, for everything to work seamlessly, it still needs a lot of things in place. The first challenge comes down to how to authenticate and qualify the data for the real estate sector. Moreover, there are severe logjams in the real estate industry with the manual dissemination and collection of data. Then there are questions about how to regulate or tax those purchases; how to deal with Bitcoin payments that stay in the native cryptocurrency, versus those that people convert to cash; and who has access to query and search data in the blockchain. Although blockchain and cryptocurrencies are here to stay, that will require stakeholders including real estate attorneys, escrow agents, and brokers to get involved.

Digital wealth creators

Currency

Currency

Nowadays there are smart platforms in the crypto industry that create wealth and value. The platforms allow people to lend Bitcoins and receive daily interest on the investment. But first Bitcoin has to be transferred to an account, and all transactions will have to be with Bitcoin.

Emerging crypto investment

The crypto business and the hype behind blockchain remind us clearly of the tech stock and dotcom manias of the 1990s. It sounds a bit like the early days of the Internet, which blossomed when investors were chasing the most speculative stocks that did not end well. Capital One, a software company, is a case in point that went public at $21/- a share. By the end of the year, the share price surged to $1,000/-, however, five years later it filed for bankruptcy.

Largest Bitcoin exchange

Mt. Gox

Mt. Gox

However great the promises, technology always have one mitigating factor, and that is humans. A few years ago, Mt. Gox, the Bitcoin exchange, built on the blockchain, burned and crashed. When it filed for bankruptcy, a large number of Bitcoins went missing from the accounts because of a problem with its code. Mt. Gox was not the only digital enterprise that went down. There were many others too. But that does not by any means mean that Bitcoin is a bubble waiting to be burst.

Concerns by authorities

As traders and investors have bid up Bitcoin’s price higher and higher, the Securities and Exchange Commission have suspended trading of some firms, most notably The Crypto Company. The Security Exchange Commission authorities cite concerns regarding the adequacy and accuracy of information about compensation paid and plans for insider sales. Lately, it has also taken steps to crack down on potential scams and frauds surrounding digital currencies, especially with initial coin offerings. The sale of a digital token to investors instead of stock is known as initial coin offerings. Several cryptocurrency officials are worried about the industry getting a bad name too. Hence they are willing to cooperate with Security Exchange Commission and other regulators to weed out bad actors.

Hopeful but cautious

There is a promising and emerging trend towards digital payments using blockchain

There is a promising and emerging trend towards digital payments using blockchain

There is a promising and emerging trend towards digital payments using blockchain. But investors need to be cautious and not chase small companies that are trying to ride the wave. Currently, Bitcoin’s adoption rate is about 1%, however with scarcity and demand comes value appreciation. So, as the adoption grows, there is hope that Bitcoin’s value will increase substantially. After all, many of today’s tech companies, such as Amazon, Microsoft, and Apple, survived the dotcom tragedy and are now doing better than before.

Coming up next:

The blockchain is the system behind cryptocurrencies. A basic grasp of how it works will prove to be sufficient for now. But in the future, this knowledge would hardly be enough. The question is how to start, and the answer is first to have an understanding of the fundamentals of blockchain. With the growth of the industry, it is possible to reach mass adoption. Even if it fails, Blockchain is here to stay and is a big game changer.

Real-estate transactions using Bitcoin

Real-estate transactions using Bitcoin

Previous blockchain blogpost:

Blockchain is the new change on the horizon. Although it is already in the financial world, the uses of blockchain are far more wide reaching. It is shaking up many sectors along with all industries including supply chain, corporate responsibility, fashion designing, and digital advertising. To accept Bitcoins, all the company needs is a Bitcoin button at the checkout and a digital wallet. It works like a cycle whereby the publishers and users receive tokens when they view the ads.

Real-estate sector transactions using Bitcoin

At its heart, Bitcoin is essentially a cryptocurrency. Blockchain backs this peer-to-peer payment system using networks. Blockchain is a digital ledger that distributes and stores information but produces no copies of it. It is a public ledger that every user, who keeps it updated, can share amongst them. The blockchain is the cutting edge technology that mines Bitcoins and other cryptocurrencies.

Offers greater cybersecurity

The fascinating thing about blockchain is that a set of blocks makes up the transaction history. These chain-like configuration is unchangeable. It takes a vast majority of participants to change the transaction history of the ledger. With the increasing number of people using blockchain, changing it is next to impossible. In the future, when there is a substantial mass adoption, it will be even more secure. Thus the unalterable nature of the transactions in the ledger offers greater cybersecurity.

Decentralised payment system

Users around the world employ tens of thousands of computers to manage the Bitcoin network. This digital ledger is decentralized which means every computer of the users records it. Unlike a physical bank, where transactions are stored and managed privately only by a bank, blockchain is outside of any central repository. There is no bank, authority, government, administrator or national treasury that sets any regulations on it. This phenomenon explains why hundreds of companies such as Victoria’s Secret and Subway accept Bitcoins as a form of payment.

Investing in Bitcoin

When Bitcoin came into being in 2009, it was worth one cent, and when it went mainstream in 2011, it rose to a dollar. That means that investors who converted government-backed currency into digital currencies in its first couple of years are now millionaires. These investors are currently looking to divest them into real estate properties and other assets.

Real estate industry

We are experiencing a significant shift in the real estate industry, as more and more people are engaging in property transactions using digital money. In cities like Los Angeles, Miami, and London, people purchase more expensive properties with Bitcoin. Stories abound of developers accepting Bitcoins for new projects in Dubai and New York.

Bitcoin price tag

Selling a house in England is getting harder with four in ten sellers reducing prices. Although London’s prime property market is in the midst of a downturn, one £17 million mansion has seen unprecedented interest from the young demographic because they could buy it in Bitcoin. Ever since dozens of media outlets including Reuters and Sky picked up the news of the sale, the owner has given over 50 interviews. Even news of much lesser value houses elsewhere in Britain had generated national headlines when a Bitcoin price tag was attached to them.

Advantages of Bitcoin

Other than free publicity for the houses, there are many benefits to Bitcoin property game. A Bitcoin transaction is cheaper as it cuts costs by eliminating third parties. The fee to process the transaction is only 1%, which is a requirement for Bitcoin transfers. Also, digital sales are compelling in international property markets because they are quick and in some cases even instantaneous. They remove the need for transfers between foreign banks and currency conversions, which can slow down the process by taking weeks or even months. Moreover, it is more transparent than the method for tracking fiat money as the firm just checks the legitimacy of the prospective Bitcoin buyers.

Buying property in Bitcoin essentially involves fixing the price in fiat money and then converting it to Bitcoin

Buying property in Bitcoin essentially involves fixing the price in fiat money and then converting it to Bitcoin Source: Bitcoin Magazine

Virtually nil volatility

Buying property in Bitcoin essentially involves fixing the price in fiat money and then converting it to Bitcoin. But the property seller absorbs none of the volatility as long as they exchange it back to fiat money as soon as the transaction is complete. Among other benefits, it is also easier and more efficient than traditional currency from a technical perspective. Many industry experts are excited about the potential for digital money and blockchain when it comes to real estate. But although digital currency transaction is the future, insiders say that we are not quite there as yet.

Mass adoption obstacles

Bitcoin analysts are less convinced that the property market would more widely adopt the cryptocurrency. First, the mechanics to convert their cryptocurrency into fiat money is very limited. Second, the significant cost of processing Bitcoin on that scale likely makes doing so less appealing. But the biggest problem is the fact that Bitcoin and property appeal to different types of investors. Moreover, Bitcoin and other cryptocurrencies are highly volatile, but real estate is a much more stable asset. It will not see full mass adoption in the property market for as long as cryptocurrencies remain volatile. 

All digital currencies

Bitcoin is not the only cryptocurrency, but there are plenty of others to choose from including Litecoin, Peercoin, Digitalcoin, and Ripple

Bitcoin is not the only cryptocurrency, but there are plenty of others to choose from including Litecoin, Peercoin, Digitalcoin, and Ripple

Cryptocurrency is a word that refers to all the digital currencies that use blockchain. Bitcoin is not the only cryptocurrency, but there are plenty of others to choose from including Litecoin, Peercoin, Digitalcoin, and Ripple. They are not physical cash or coins but rather virtual currencies stored in a digital wallet. It is more or less like a foreign currency whose value is still affected by demand and supply, world happenings, and government policy.

Cryptocurrency

Cryptocurrency

Connection between cryptocurrencies

As Bitcoin’s value skyrockets, stories about digital currencies have become dominant. There is a loose connection between all digital money, as a boost in Bitcoin typically means a spike in other currencies. In other words, when Bitcoin rises in value, there is usually a series of small rises in other currencies during the same period. Ether and other tokens will follow Bitcoin’s expansion pattern because most of Bitcoin’s milestones follow a continued growth trajectory. However, these fluctuations are not necessarily good predictors of future behavior. Crypto investors will be able to forecast how closely other currencies will follow Bitcoin with the completion of user metrics, awareness, and valuations. But caution should be exercised when investing, as they are exposed to low-likelihood risks and are more volatile than traditional stocks that could trigger a market crash and be devastating.

Coming up next

In the real estate blockchain enables to store authentic online documents, draw digital smart contracts, and keeps the identities of the parties anonymous. While all sounds great, for everything to work seamlessly, it still needs a lot of things. As traders and investors have bid up Bitcoin’s price higher and higher, the Securities and Exchange Commission has suspended trading of some firms. Investors need to be cautious and not chase small companies that are trying to ride the wave.