Blockchain technology01 / 05 / 21 Visitors: 699
Since the beginning of 2017, the aggregate capitalization of the cryptocurrency market has grown by more than 2,500% to $481 billion. The two largest cryptocurrencies in terms of capitalization, Bitcoin and Etherium, brought respectively 1,700% and 6,900% of profit to investors. In traditional markets, investors are sometimes will not see this kind of profit in their entire life. The cryptocurrency market took less than 12 months to achieve such results.
The reason for the sharp growth of the cryptocurrency was the fuss associated with the blockchain technology, which is the basis of most of them. The blockchain has the potential to transform many industries and change the ways we manufacture, sell, buy and consume products. Increasing transparency, traceability and security can be a breakthrough in establishing a safe and much more reliable economy. Blockchain has five significant benefits over existing payment networks, thanks to which it could become a widespread technology in the financial and other industries in the future.
One of the main reasons why blockchain is so attractive to businesses is that the blockchain almost always has open source code. This means that other users or developers have the ability to change it at their own discretion but at the same time it makes it incredibly difficult to imperceptibly change previously registered data. Therefore, blockchain open source makes it a especially reliable technology.
· Decrease in transaction costs
Transaction participants, users or organizations, do not bear the costs associated with the work of the intermediary because the blockchain allows transactions without an intermediary, for instance, a bank. That allows for their costs to be reduced.
· Accelerating transaction calculations
Regular banks often need a few days to complete a transaction. Such terms are stipulated by the protocols in the banking software and also by the fact that banks operate only during typical working hours, Monday to Friday. In addition, financial institutions can be different timezones and this can also delay the processing. This technology works 24 hours a day, seven days a week, which means that transactions are much faster.
The biggest advantage of a decentralized storage is the opportunity to scatter data in an encrypted and disassembled form between random network members. Thus, data owners can endure direct hacker attacks since they will not be able to get complete access to the essential information. Another pro of a decentralized system is reducing storage costs.
· User-managed networks
Finally, crypto-investors tend to be attracted to the features of the blockchain system related to issues of network control. In the case of blockchain, it also does not need an intermediary; this task is solved by users and developers. For example, the failure to reach an 80 percent consensus on the update of the Bitcoin blockchain led to the split of the cryptocurrency into two: Bitcoin and Bitcoin Cash.
A concern that cannot be dismissed
Investors have repeatedly overestimated the potential implementation speed of any technology. None of the breakthrough technologies were implemented instantly despite the fact that investors valued shares of companies engaged in relevant developments very highly. It takes time to lay the foundation for the use of new technologies and it may take several years until the payment networks fully switch to the blockchain. Since we do not know how fast it will be implemented, there is no sense in trying to estimate the cost of this technology. This may be a serious problem for cryptocurrency investors.