Blockchains, Cryptocurrencies & The Decentralized Economy: Part 3 - The New Internet

To pure minds, blockchains are a type of spreadsheet containing information about transactions. Blockchains comprise many technologies that work together to produce an archive of records organized in data objects called blocks. Over the last few years, more than $800 million has been devoted to blockchain technologies and according to a report, blockchain investment will keep increasing as years go by.
The extraordinary progress in the price of Bitcoin, as well as the achievement of Ethereum, Bitcoin Cash and other cryptocurrencies, has caused people to think that blockchains are only about cryptocurrencies. But, the truth is that blockchains can do more that make cryptocurrency transfers seamless. In fact, many people who share information and do not trust other parties have implemented the technology in their field. On the other hand, a select group of people won’t get involved with them without knowing its prospects. To ease any fear of potential fans, traders or investors may have about the whole concept of blockchain and cryptocurrencies, we have a compilation of how blockchain has changed the way the internet works, its influence on the rise and adoption of digital currencies and how it has birthed a decentralized economy.
  • Blockchain operates on a transparent system.
  • Blockchain technology creates new avenues for startups to access capital.
  • Blockchain tech improves Identity Management.
  • Blockchains bring the rise and use of smart contracts for business transactions.
  • There will be no need for transactions to go through third-parties.

Blockchain operates on a transparent system

Running a system that is accessible is probably the best thing about this blockchain technology. What this means is that the blockchain ledger is not only available to anyone who has an encrypted private key; there is also a low risk of manipulation by a party as other members can see where changes occur. The blockchain technology uses an append-only format which means that users can add new data to a blockchain, but they cannot remove old data. This format creates a permanent record of data that increases transparency and accountability amongst users.

Blockchain technology creates new avenues for startups to access capital.

As blockchain technology makes transfers more efficient, the flow of assets is also affected. This effect is most noticeable in crowdfunding as the rise of initial coin offerings has created a new system of funding projects. Startups with concepts for blockchain applications can now access capital and financial support from interested investors without inputs from third parties.

Blockchain tech improves Identity Management

Using the decentralized system of Blockchains, the confirmation of online identity will be much quicker. In other words, blockchain technology will allow users to keep track of their data, so if somebody is using it for fraudulent activities, they can react. Users will also be able to choose who to share their information with thus allowing them to manage their online presence and privacy much more efficiently. You even get to register your identity, secure your keys and data, collect badges and credentials, login to decentralized apps, and digitally sign transactions.

Blockchains bring the rise and use of smart contracts for business transactions

Smart-contracts also called self-executing agreements or blockchain contracts to help with the exchange of money, property, or shares in a transparent way. Smart-contracts store terms of accord via blockchain and make connections so easy that you can submit an insurance claim online and receive an immediate payout – as long as your application meets all the mandatory criteria. But the use of smart-contract isn’t limited to the insurance sector as it can be useful during an employment process or a supply chain management, i.e., if an item is delayed or lost, the smart-contract can be checked to confirm its expected location.
Basically, smart-contracts are more trustworthy than traditional contracts are as all records are stored permanently and can be used for verification.

There will be no need for transactions to go through third-parties

With the use of blockchains, there would be no need for third-parties or organizations, like banks and lawyers, to verify transactions as individuals can quickly and safely make trades to each other. An individual can apply for a loan and record ownership rights in a decentralized blockchain system. Already there is a blockchain-based code of behavior, OpenLaw, which allows for the design and implementation of legal agreements. Using OpenLaw, legal representatives can digitally sign and store legal contracts in an extremely secure manner.
With all these said, not only is it evident that blockchains have many positive effects, but they are also useful to countless industries that want to improve competence, safety, and procedures. With blockchain technology, cryptocurrencies such as bitcoin and ethereum have become the go-to to carry out transactions and reach agreements. In fact, many governments and central banks are interested in introducing digital currencies and have begun investigating them.
Cryptocurrencies have also become quite famous as a new source of fundraising, and the implementation of blockchains and cryptocurrencies allows businesses to remove the need for third-parties in various procedures. In other words, crypto eliminates an organization’s power of ownership over user data and product content. But despite the many pros, cryptocurrencies are also a new type of investment that is currently not government-regulated and can bring dangers to some investors.
Regardless, it will be exciting to see the other changes that the blockchain technology will cause on the internet amongst other things.

Comments

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