A quick search for the term “blockchain” on Google brings up several articles, pages, and video tutorials about the latest digital currency, with people, seems more confused than ever before. So, what is the “blockchain”? And more importantly, how can we use it to protect our money, secure our privacy, and increase our freedom? In this article, we will attempt to answer those questions.
The term “blockchain” is an informal term, describing a network of computers, generally networks of several hundred interconnected nodes. The participants in the network to maintain a record of all past transactions and no new transactions are allowed to be made until the entire network is in agreement. Because the entire network needs to agree before any transaction is processed, the entire network is called a “blockchain”. When we refer to a “blockchain”, we are using the term to describe the ledger of transactions that underlies the entire system.
The primary benefit of the Blockchain is its ability to allow users to transact without the use of traditional banks. Transactions can occur anywhere in the world where Internet connections are available since the Blockchain is open to anyone who wishes to participate. Transactions are fully protected from third parties because they are encrypted and only accessible by the relevant parties involved in the transaction. With this protection, the entire purpose of the decentralized ledger becomes much more feasible.
Since the Blockchain manages all transactions, there is no need for a central authority or any single institution to keep records of these transactions. The decentralization of the Blockchain makes it impossible for a single institution to control the total number of currencies that exist in the world. Since the Blockchain is open to anyone who wishes to participate, there is no way for any one country to manipulate the global value of the currency. Because the Blockchain is open to everyone, there is also no way for a government to monopolize or control the supply of money or otherwise manipulate the overall value of the system.
Another benefit of the Blockchain is that there is no need for governments or central banks to be involved in the process of transferring funds between participants in the decentralized ledger. There is no need for a third party to take a risk in conducting transactions or holding accounts since all transactions are encrypted and secured by cryptography. This ensures that the entire system is completely free of third-party influence.
One of the biggest threats to the value of the Blockchain comes from attempts to change the protocol of the underlying currency, which could alter the chain of events and make it vulnerable to outside influence. However, if the programmer of the underlying cryptographic protocol can figure out a way to add extra layers of security onto the surface of the Blockchain, then it won’t be long before other programmers can start adding their own layers. Even if the programmer cannot figure out an extra layer of security, the use of this technology in combination with decentralized ledgers will bring about the decentralization of trade quite soon.