September 26, 2022

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What does the revolutionary blockchain technology promise?

In fact, the blockchain was developed as a reservation system for the cryptocurrency Bitcoin. But the technology’s potential applications are diverse. What does blockchain technology promise and how can companies use the huge potential?

Blockchain creation

Inventor Satoshi Nakamoto launched his cryptocurrency – bitcoin – after the financial crisis in 2008. At that time, confidence in banks was very low due to, among other things, the collapse of the major US bank Lehman Brothers. Many people lost their homes and large portions of their savings in this financial crisis. Global trade slumped because it wasn’t clear if the company’s bank would have any cash left when the deal closed.

Satoshi Nakamoto wanted to create an alternative currency. A decentralized currency that belongs to everyone, everyone can participate in it and protect it from currency devaluation and confiscation by the state, it is a decentralized and secured assets at the same time.

The inventor of Bitcoin, using the underlying blockchain technology, has developed an economic feat with global implications. The technology makes it possible to unambiguously assign and transfer ownership in just a few seconds. Entries cannot be processed in the blockchain, as each transaction must be confirmed by millions of computers and then stored and published on the blockchain in an immutable manner. Data is organized, stored, managed and processed in a decentralized way, without authorities like banks or states.

This is how the blockchain works

Simply put, a blockchain is a kind of ledger, here all the data is recorded in chronological order. In the case of cryptocurrencies, this consists of many tabs (blocks) that are sequentially created as a string (chain). A series of transactions is stored on each card until it is filled. To confirm the “authenticity” of transactions, digital signatures are used on the blockchain.

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With cryptocurrencies, the user in question always has his own copy of his records. However, the records are visible to everyone, but can only be added by their owner through his private keys, whose transaction is then confirmed by millions of computers.

Bitcoin uses Proof of Work verification techniques to prevent fraud. Proof of work is an algorithm in which mathematical tasks that need to be solved with maximum speed are assigned. The tasks are solved by the so-called “miners”.

Miners are small computers (servers or as a graphics card device) that are designed and programmed with a specific algorithm to solve tasks in seconds, with the fastest computer receiving a fixed amount of cryptocurrency as a reward.

In short, the main features of the technology are the presence of a decentralized and redundant network and an added commercial repository.

Take advantage of the blockchain as a business

The decentralized reservation system makes the hearts of entrepreneurs shine. Previously infected vulnerabilities in reservation systems are now faster, cheaper, safer and easier thanks to blockchain technology. This allows companies of different sizes to compete with each other. Blockchain technology allows access to new business areas for companies that were previously held back by high spending of time and money.

The extraordinary possibilities in everyday business impress with automation, simplification and reliability. Companies only need to mirror their internal accounts against the blockchain to fully record their transactions. The company’s blockchain does not have to reflect its data to the outside world, because the company owns the only truth about its transactions.

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Blockchain also allows cost-effectively mapping the integrity of electronic documents. For this purpose, a “fingerprint” is generated electronically and written into the blockchain document. Thus, impartiality can be demonstrated retroactively at any time without any doubt. Moreover, electronic data can be sent by e-mail, for example, without compromising its integrity and this reduces monitoring and validation processes.

conclusion

The blockchain represents a decentralized and immutable record of data, which serves as the basis for the cryptocurrency Bitcoin, for example.

Blockchain technology can be used for a variety of financial and non-financial use cases. With their potential to build trust, along with security and savings on the part of the company, we can look forward to the “technological future of the blockchain.”

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