Is blockchain technology only for cryptocurrency?

However, blockchain technology is not exclusive to the cryptographic world. In fact, some of its most interesting applications have nothing to do with Bitcoin or any other cryptography. A very simple explanation is that the blockchain is a digital record that is divided into parts, called “blocks”, that are stored in several places. Therefore, blockchain technology is not only relevant to cryptocurrencies.

However, the blockchain is mainly concerned with the decentralized storage of information and the consensus of certain digital assets, which may or may not be cryptocurrencies. So can blockchain be used for anything? Rather than being an optional technology for cryptocurrencies, blockchain is a fundamental feature of it. Ultimately, the growth and development of the blockchain have been driven by cryptocurrencies, as cryptocurrencies depend on their network to exist. Technology, which is not limited to the financial sector, offers multiple solutions that have already revolutionized and will continue to revolutionize various markets in the coming years.

The blockchain protocol would also maintain transparency in the electoral process, reduce the staff needed to hold an election, and provide officials with near-instant results. Let's say that a hacker, who also manages a node in a blockchain network, wants to alter a blockchain and steal cryptocurrency from everyone else. Blockchain has the potential to eliminate the need to scan documents and track physical files at a local registry office. In addition, you can buy shares in a company that is developing blockchain solutions to gain indirect exposure to distributed ledger technologies without making any investment in cryptocurrency.

The data stored on the blockchain is tamper-proof because the network of nodes (the different computers on which the shared database is stored and that validate transactions) can cross-reference to locate the source of a controversial change, so the technology has several possible cybersecurity applications. While confidentiality on the blockchain network protects users from hacks and preserves privacy, it also allows illegal trade and activity on the blockchain network. To see how a bank differs from the blockchain, let's compare the banking system with Bitcoin's implementation of the blockchain. At that rate, it is estimated that the blockchain network can only handle about seven transactions per second (TPS).

The design of bitcoin has inspired other applications and blockchains that are readable by the public and that cryptocurrencies use widely. Currently, Bitcoin and other cryptocurrencies protect their blockchain by requiring new entries to include proof of operation. A key feature of smart contracts is that they do not need a trusted third party (such as a trustee) to act as an intermediary between the contracting entities; the blockchain network executes the contract on its own. However, whether you invest directly or indirectly in blockchain-based startups, consider risks, such as technical failures, forks, or human error.

NFTs, as they are more commonly known, are tokens on blockchains, but they differ from cryptocurrencies in that they are unique digital assets. Essentially, a digitized and decentralized public ledger, the blockchain is a formation of digital information, or blocks, stored on a network of computers that create a database. The ability to track all transactions also increases the transparency and security of blockchain-based payments.

Gertrude Majera
Gertrude Majera

Freelance web aficionado. Subtly charming zombie junkie. Typical coffee maven. Wannabe travel aficionado. Hardcore music lover. Passionate pop culture aficionado.

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