IN A NUTSHELL: BLOCKCHAIN AND DIGITAL CURRENCY
The Inevitable Riding-in-Tandem
The words in our title are the hottest buzzwords of the Millennium, and if you are still not familiar with them up to this day, then you are in the right place. They have actually morphed into watermarks that are defining the use of modern-time technology.
As these two huge words would require each a comprehensive coverage, we will just have a fly-over-states ELI5 view on how they are impacting the presence of technology in the financial landscape for the sake of enlightenment, “Explain it like I’m 5.”
ELI5: BLOCKCHAIN 101
Stuart Haber and W. Scott Stornetta first proposed Blockchain technology as a research project in 1991. They wanted to introduce a system whose goal is to allow digital information to be recorded, documented, and distributed without being tampered with or edited. Nobody at that time would yet be able to grasp what these two guys meant until almost two scrutinizing decades later, the pseudonymous Satoshi Nakamoto used the Blockchain protocol to launch Bitcoin in January 2009, introducing the digital currency. Both needed one another as an inevitable riding-in-tandem to launch themselves into a real-world application. Nakamoto trustfully referred to it as “a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”
Blockchain and blockchain
The Blockchain protocol of Bitcoin became the universal blueprint that gave birth to a host of other digital currencies. Each specific digital currency then has to have its own blockchain network in order to exist, be stored, and operate as viable forms in the exchange of money. Bitcoin’s Blockchain protocol is the foundation upon which all other blockchains of digital currencies are essentially reincarnated which are:
1. Unique and non-duplicable
2. Non-repudiable and impossible to “double-spend”
3. Scarce and limited in supply
4. Durable and immutable
5. Divisible and uniform
Simplifying, we can call digital information as “the block”, which is stored in a public database called the “chain.” It is the backbone upon which digital currency is built on. Blockchain in the upper case would refer to the Bitcoin protocol. Whereas, the blockchains in the lower case have based their systems upon the foundational Blockchain protocol.
ELI5: DIGITAL CURRENCY 101
The prevailing pandemic brought mankind to many realizations, more specifically in the use of cash. Though immediate and efficient as a payment method, disadvantages include the fear of coronavirus transmission itself, difficult economies presenting money loss, fraud, difficulties withdrawing and depositing, as well as costs and expenses associated with money management in traditional financial institutions.
E-money and the Digital Currency.
To reduce the pitfalls and shortcomings of cash transactions are the purposes to which e-money and digital currencies are headed. Currently, e-money is widespread because of the stability that fiat currency is holding. But while e-money is just as centralized as actual cash is, only because it is efficient due to online transactions, digital currency is borne with speed, security, and decentralization.
Bitcoin protocol and other blockchain protocols serve as public or distributed ledgers in transacting with digital currency businesses, and each user has a copy of that ledger in their computers which are constantly being updated. Miners are responsible for confirming and recording transactions and entered into blocks which appear simultaneously on all users ledgers. Completed blocks receive a hash alongside it and join under the end of the chain. Miners receive a digital currency reward for every hash completed.
Digital wallets are softwares with housing capabilities to store digital currencies for indefinite periods of time and are secured with at least one public key and one private key. A trusted custodian such as Wallex can keep cryptos in a state-of-the-art depository as insured as can be with personalized hardware devices like APIs for every customer.
Anonymity and Transparency.
Full anonymity is guaranteed in the use of digital currency as each operator can create an infinite number of crypto addresses, and at the same time transparent in each and every transaction.
24/7. With the possibility of infinite transactions within minutes with Anyone, Anytime and Anywhere.
Blockchain’s Other Practical Uses
Blockchain protocol has proven its worth in the financial system that aside from cryptocurrencies and banks, it is now being ventured into by other sectors of society such as health care, property records, smart contracts, supply chain, and voting.
While many other companies are still contemplating the first base “if” of technology, others have already run to the second base “when”. Wallex has already covered the third base ahead to lead the pack to the homerun in the service of future-ready clients and customers. And the future is already knocking at the door.