Cryptocurrencies have seemingly exploded onto the scene in the past decade, and aside from a few blips (most notably this year), it shows no signs of slowing down. In short, it’s here to stay for the long run. But what is it that has made this form of digital currency so popular? A large part of the story revolves around the original token Bitcoin and its underlying technology. This post will examine Bitcoin, how it has propelled the crypto industry to stratospheric heights, and the technology behind it.
What Is Bitcoin?
The ins and outs of blockchain technology would not be complete without some discussion of Bitcoin, its origin, and why it is still so widely traded and benchmarked against even today. In fact, current Bitcoin lending rates indicate that it is still in high demand. In addition to buying and selling things, bitcoin can also be exchanged for other currencies. It was invented in 2009 by an unknown person or group using the alias “Satoshi Nakamoto,” who remains elusive to this day (although speculation abounds). Unlike traditional money, bitcoin cannot be printed. A process called mining is used to create it by computers worldwide. Bitcoin mining uses computers to solve complex math problems, and bitcoins are rewarded for solving them. Bitcoin is decentralized, so transactions and the blockchain ledger are not maintained by a central authority. In other words, bitcoin transactions do not involve banks or government regulators, so you’ll pay less for them and get your money faster, too, since bank teller approval is unnecessary.
Who Created It?
As mentioned earlier, a person or group known only as Satoshi Nakamoto is credited with creating the first blockchain whitepaper that would eventually become the behemoth that Bitcoin is today. Satoshi Nakamoto published the Bitcoin whitepaper in 2008 (although it is believed that work began in 2007). The paper is a nine-page document that outlines the basic design for a cryptocurrency and explains how it would work. The article is not an academic study or research but rather a technical description of the Bitcoin protocol. It is believed that Nakamoto owns up to 1,100,000 Bitcoins which at today’s value would place the total at almost $2.5 billion! Nevertheless, while those incredible numbers are interesting in their own right, the core blockchain tech is the star of this tale.
Why Has Bitcoin Remained So Popular?
In a sea of exciting cryptographic tokens, it is easy to wonder why Bitcoin remains the top dog. However, aside from a few contenders such as Ethereum, Bitcoin Cash (a fork of the original token), Litecoin, and a smattering of others, Bitcoin has remained the most exciting option for creating wealth over the long term. In fact, in some countries such as El Salvador, it is now legal tender (despite grave warnings from global economists). It is the most common token and is readily available on almost all crypto exchange networks, making it far more accessible for beginners to dip their toes inside the heady world of crypto.
What Is A Blockchain?
Information about transactions is stored on a blockchain, which many dubbed as a digital ledger. It’s the technology behind Bitcoin, Ethereum, and other cryptocurrencies. Many competing tokens will use their own variations of a blockchain that have increased speed, efficiency, and transparency over and above the blockchain Nakamoto developed. Nevertheless, Bitcoin remains the most popular token, which many institutional investors are happy to include in their portfolios. It is a decentralized database that records transactions across many computers, preventing the record from being altered retroactively without affecting all subsequent blocks and the network’s cooperation.
What Is So Appealing About Blockchain Technology?
Blockchain technology is so popular because it offers a decentralized, transparent, and secure way to store data. The information is stored in blocks that are connected via cryptography. Changing the entire blockchain would be necessary to alter the data so that no one can modify it without consent. It has several advantages over older methods, including:
- Security: Due to its distributed and encrypted nature, blockchain makes it difficult for malicious individuals to hack it. Since all users have copies of the blockchain, any tampering will be detected. However, it isn’t 100% secure, and hacks have and will continue to occur.
- Decentralization: Because verification comes from the consensus of different users, blockchain tech has mass market appeal. The next point has been made possible by this decentralization…
- Fast processing times: Thanks to its decentralized nature and its availability 24/7, blockchain has proven to be a quick and efficient technology to process specific actions.
- Automation: Because various blockchains are programmable, companies and individuals can set them up to trigger different actions and events. For example, a freight company might use it to initiate payment once the final product has been successfully registered into the system. This creates a high level of efficiency and significantly reduces waste.
What Industries Use This Technology?
The technology developed by Nakamoto all those years ago has found use in much more than mere currency. A vast array of industries uses it to optimize their performance.
The most apparent industries to make use of blockchain tech are banking institutions. This is because, aside from being designed for use with a currency, fintech has been one of the main drivers of emerging technology over the years.
For decades, democratic governments have struggled with the issue of voting. This can be seen most recently in the ongoing saga of US politics and the most recent election. Blockchain can be used as a method for governments to enable voters to cast their ballots securely and anonymously while also allowing for instantly verifiable results.
Another industry to benefit from blockchain is healthcare. In most instances, they use it to store their patients’ private medical data and share it quickly and securely with other departments and healthcare providers.
It is no surprise that blockchain is widely used in the supply chain. As one of the most complex human-made processes to ever exist, the supply chain has lowered costs, increased efficiency, and reduced waste. Blockchain is used to keep track of the supply chain process and make sure that no one tries to tamper with it. It helps businesses monitor the quality of their products, protect intellectual property, reduce fraud, and more.
Founded over a decade ago as a research whitepaper, Bitcoin has become one of the most important innovations in recent years. Blockchain has brought about a multitude of benefits to society, ranging from medical to politics, and it looks like it will continue to do so.