What is the Future of Blockchain?

In this technological era, many of our daily activities take place right on our mobile devices or computers. Whether people are exercising while streaming a great playlist, sending an email on-the-go from their phone, or working in the office – it is facilitated by technology.

It is not just technology that is advancing, other industries are as well, including the finance industry. One of the biggest changes is occurring at the where blockchain meets the intersection of technology and finance. We can already use our money to buy things online, manage our bank accounts, and make international financial exchanges. And now, with cryptocurrency, we are seeing a new era in technology and finance.

Bitcoin, a revolutionary virtual currency invention created in 2009, changed everything.

What is Bitcoin?

Bitcoin is a cryptocurrency created and saved electronically by very complex algorithms. Electronic financial regulations are constantly evolving to meet the demands of ever-changing needs. These regulations protect individuals, corporations, and financial institutions from things like fraud and cyber attacks.  But, it is very hard to establish good regulations that are fair for all. This is the primary reason that cryptocurrencies such as Bitcoin are not regulated by the same laws as other banking or financial transactions. This interesting distinction is the reason why many choose to invest in it – it is very attractive and offers tremendous potential upside.  But, it is important to emphasize that the upside is certainly only a potential, many investments in cryptocurrency come with very high risk.

Is Bitcoin the Only Cryptocurrency?

Most people have heard of Bitcoin even if they have no idea what cryptocurrency is. So, is Bitcoin the only cryptocurrency? The short and simple answer is – NO. At this current moment in time there are around 2,160 types of cryptocurrency and every day new cryptocurrencies are created. But, Bitcoin is the basis of other cryptocurrencies, including some of the most well-known cryptocurrencies) including:

  • Ethereum
  • Ripple
  • Litecoin
  • Dashcoin
  • Bitcoin Cash

How Is Cryptocurrency price is determined?

The basis of price for every cryptocurrency is determined by supply and demand. In the last 3 years the “YUAN” has dropped in value significantly which is why China has been particularly active in cryptocurrency investments.  Because of this, Bitcoin had the highest value cryptocurrency in history: more than $20,000 USD!

Where are cryptocurrencies purchased?

Cryptocurrencies can be purchased online in an array of locations often referred to as “platforms.”  Users are able to register as investors with various platforms and purchase cryptocurrency with a debit card, credit card, or by transferring funds from a bank account.  Depending on the platform, the process to create an account can be quite lengthy and take a while because every platform executes their own unique verification and security measures to avoid hacking.

Some of the most well-known platforms to buy and sell cryptocurrencies include:

-Bitso: A Mexican platform that allows users to make deposits in Mexican Pesos. The first deposit is free of taxes and all subsequent transactions are subject to a tax of 0.5%. This platform executes a device validation which verifies if the device being used is allowed to log into the account. If the device is registered access is automatically granted. If the device is not, Bitso sends an email to the user’s email address asking for an authorization to add the device to a white list.

-Coinbase: One of the most popular sites to buy cryptos, the commission charged is 3.5%.

-Kraken: Though less popular than Coinbase, the commission is 0.26% at most – significantly lower than Coinbase.

-Binance: According to the trading volume on this site, Binance is considered to be the biggest cryptocurrency exchange in the world. This platform also created its own cryptocurrency called “BINANCE COIN (BNB)”.

How can I manage my cryptos?

Once a registered investor has set up their account, the next step is to make a deposit. This amount will be reflected in a “wallet.” Using the wallet, the user can buy, sell, and convert USD or MXN in cryptos as desired.

  1. All of the transfers, even from platform to platform (for example: Binance to BITSO) are listed in the wallet.
  2. If a cryptocurrency value changes, the new value of the account will change automatically in the wallet.
  3. The user’s wallet is completely unique – there’s no two identical wallets. Every wallet is associated to a bank account and exists only within the platform.

If it is necessary to transfer between platforms, the user must use “blockchains.”

What is BLOCKCHAIN?

Blockchain is a technology that allows digital data transfers using a very secure and sophisticated coding process. The blockchain saves all of the deposits and withdrawals in the platform. And, it is not dependent on an intermediary to identify and certify the data. Rather, the data is distributed in multiple nodes. Once the data is saved in the blockchain it cannot be deleted, only new data can be inserted.

Another advantage of blockchain is that, should a network outage occur, only one node is necessary to validate and certify the information, making it almost impossible for data loss to occur.

How blockchain works

A blockchain is composed of blocks of specific, encoded data. Every block has two codes as well as the transaction with associated data. One of the codes has data related to the previous package and the other one has data related to the next block (information regarding the data source is not available). The process to join all the packages and validate the data contained is known as “mining.”

In this process the first block decrypted multiple times is the winner. This means that the first block decrypted and validated by many nodes is the block used to generate the coin.

Bitcoin mining is a very complex process and requires sophisticated infrastructure to decrypt those blocks and generate the chain to ultimately obtain a part of a bitcoin or even 1 bitcoin.

What Does Blockchain Mean For the Future?

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tapscott, authors Blockchain Revolution (2016).”

According to Blockchain Revolution, the blockchain is one of the most secure processes to execute many tasks. It can even be implemented to make online transactions or data transfers like to send chats, documents, etc.

One example of how blockchain could be used in the future is the purchase of event tickets online.  If blockchain is used to avoid data loss, falsification, or other fraud, it will be far easier to verify buyer identity and validate the veracity of a ticket.

If we are trying to determine what the best process is to improve security in a complex and difficult-to-penetrate way, the best option is blockchain.  By implementing blockchain in such a way, people around the globe can make deals P2P, excluding companies like UBER, FIVERR, etc who charge fees for a service. If an individual or small business uses blockchain to generate their own chain to send and receive payments for services or products, it will be far more secure.  Someone could purchase a blog article, nobody else will be able to intercept the money, only the author, because blockchain transactions carry no transaction cost.  With Blockchain, companies such as Spotify, iTunes, or others can be replaced because individuals will be able to get music directly from the source, making for a faster transaction that is more secure.  One specialist shared an analogy about just such a scenario:

“The traditional way of sharing documents with collaboration is to send a Microsoft Word document to another recipient, and ask them to make revisions to it. The problem with that scenario is that you need to wait until receiving a return copy before you can see or make other changes because you are locked out of editing it until the other person is done with it. That’s how databases work today. Two owners can’t be messing with the same record at once.That’s how banks maintain money balances and transfers; they briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access (or update again). With Google Docs (or Google Sheets), both parties have access to the same document at the same time, and the single version of that document is always visible to both of them. It is like a shared ledger, but it is a shared document. The distributed part comes into play when sharing involves a number of people.

Imagine the number of legal documents that should be used that way. Instead of passing them to each other, losing track of versions, and not being in sync with the other version, why can’t *all* business documents become shared instead of transferred back and forth? So many types of legal contracts would be ideal for that kind of workflow. You don’t need a blockchain to share documents, but the shared documents analogy is a powerful one.”

– William Mougayar, Venture advisor, 4x entrepreneur, marketer, strategist and blockchain specialist

The reason why the blockchain has gained so much admiration is because it is not owned by a single entity. Thus, blockchain is decentralized and the data is cryptographically stored inside.

The Future of Blockchain is: The Blockchain for Everything in Our Life…