Blockchain, bitcoin and digital currencies: Business basics you need to know

blockchain

Blockchain, bitcoin and digital currencies: Business basics you need to know

I love to watch a new adventure with intrigue. Even more, I love when there is something exciting going on with opportunities for business growth. In the last few months, we have seen some dramatic developments in a field that has been previously obscured in puzzle, darkness, and uncertainty.

The area is blockchain technologies. It is a way for people to use digital currencies like bitcoin and others as digital cash. This is in contrast to fiat currencies like the U.S. dollar, the Euro, the Japanese Yen and the Chinese Yuan, examples of money that is backed by a government and a central bank.

Blockchain vs. fiat currencies

Blockchain technologies are based on the internet and math. They also are different from fiat currencies in that they are not backed by the “good will and faith” of a particular government.

The blockchain is a database. Think of it like a database that is scattered among many different computers around the world. It is often called a distributed database. It is a ledger of what happened with various transactions, and these records are kept on thousands of computers around the world.

There is no one central place where we have all of the blockchain. Instead, each computer that has access to a blockchain, called a node, contains the information and tracks what is happening with other transactions.

This can be used for digital currencies, keeping track of records, and making sure that no previous records are changed. That part is very important. You can trust that you own the coins you have purchased or earned. They are not subject to change, and all those computer nodes around the world are keeping an eye on it to make sure the record doesn’t change. This way trust is built into the system, and it is based on mathematics, not on trying to find a reliable third party to trust.

Bitcoin

Bitcoin is the most popular digital currency associated with blockchain. Some people find it mysterious and even question its legitimacy because it is often been associated with criminal activities. That perception is changing as many governments are accepting bitcoin as a legitimate payment system. Already this year, we’ve seen governments in Japan, Australia, the Philippines, Russia and others accepting or considering accepting the use of bitcoin in everyday transactions.

Continue Reading 

Leave a Reply