A global network of computers communicates with each other and create a chain of blocks. Each block has records of several transactions and each block is linked to the previous chain block via a unique digital signature. This process creates a unique chain of blocks, where data cannot be forged or altered. The whole procedure ensures strict security and transparency of the data transfer and storage.
The first application used the blockchain technology was bitcoin, introduced to the public from Satoshi Nakamoto. Bitcoin’s blockchain is a public ledger which records bitcoin transactions. For each new block added to the chain, it contains a cryptographic hash of the previous block, a timestamp and all newly validated and confirmed transactions. The blockchain is distributed across multiple computers and systems, the Nodes. Each Node has a copy of the blockchain, which is updated accordingly when there is a new validated change to the chain.
Although bitcoin appeared right after the US bank crisis and the House Bubble of 2008, many people is still skeptical about its usage and real-life applications. Although it is in the Markets for over a decade, its adoption is still relatively low while the complex technology behind it, does not make things easy for mass adoption from the public. In addition, the decentralized nature comes in direct conflict with the traditional banking and finance system and the usage of fiat currencies.
Over this decade, Bitcoin had its ups and downs with Market winters and milestones, while reaching up to almost $68k as all-time high in Nov2021. There were times, where big corporations like Tesla, accepted it as a form of payment and things appeared very promising for this new Market player. It’s worth mentioning that El Salvador became the first country in the world to make bitcoin a legal tender in Sept2021, requiring all businesses to accept it as a valid payment currency. Currently bitcoin’s price hovers around $20k.
With the obvious war from the banks and the existing financial system, bitcoin seems to be resistant having its own followers. Other crypto projects appear from time to time with promising real-life applications that will ease our day-to-day financial transactions. One thing is for sure. Blockchain and its applications are here and cannot be ignored.
