Blockchain & Bitcoin have often been thought of as being one and the same, and one cannot blame anyone who belongs to this school of thought. The two have many similarities; furthermore, a digital ledger drives Bitcoin. Introduced in 2008 as the first virtual currency, Bitcoin is credited as being a creation of Satoshi Nakamoto, a Japanese national. People often confuse Bitcoin and Blockchain due to two reasons:
Bitcoin has become very popular as one of the first currencies
It is the platform on which people earlier formed a basis on the knowledge on Blockchain technology
How the Bitcoin Blockchain Functions
Over the years, Bitcoin has gained many users; its Blockchain plays a major role in running and storing the transactions that involve this coin. The database applies the end-to-end concept and the users of the network validate operations through a practice known as mining. The Blockchain then applies Proof-of-Work algorithm to authenticate processes. Each user must develop a POW; despite this extremely time-consuming process, it improves security by giving all users capability to authenticate a transaction. Essentially, each user must show a PoW in order to process a transaction. PoW works in a way that it protects the encrypted data from alterations.
The Blockchain potential
The basic thought about the Blockchain technology is that it only offers the digital currencies. The technology is however very versatile and advanced, with the capacity of fitting into any business models and providing resolutions to existing problems.
Storing and Tracking of Assets
Currently, there is a huge and heated debate as to whether a Blockchain is independent of virtual currencies are of any value. Current events seem to favour the affirmative side of this debate. It is interesting to note that basically, any business can thrive on Blockchain. Take for instance EverLedger, a company that is currently brilliantly using Blockchain to have a trace in the background of luxury goods. This helps reduce the prominent scams that plague this industry.
All companies using Blockchain gain two advantages: privacy and security. The Bitcoin Blockchain has given users the ability to conceal their identities. It is no secret that most companies must provide their users with adequate privacy and security, ensuring the safety of their personal information. It is also important for companies to have the real identities of their clients, due to the due diligence compliance obligations. Also, they have to ensure they are dealing with legitimate people (bitcoin clients operate with pseudonyms). Blockchain enables them to do this by providing a platform through which they can track transactions.
Speed and Technology
The Blockchain uses the end-to-end technique, eliminating the need for an intermediary. It is distributed on several computers and can be updated in real time. It is also to an extreme extent immune to cyber hacking and attacks because the system is not stored or operated from one computer. The input of a record on the Blockchain means that alterations are not possible.
There exists a heated debate revolving around cryptocurrencies and Blockchain technology. People have concerns that virtual currencies may just be a bubble that could burst anytime, leaving millions of investors frustrated. The burst of the bubble would also lead to losses translating into millions of dollars. Recent hackings of several exchanges have been the tip of the iceberg of what would happen should the bubble burst.
However, should this bubble burst, it would have no effect on Blockchain technology as it operates independently from the currencies. The technology is so vital and versatile that worldwide business models can employ it to improve the economic sector.