Blockchain And Cryptocurrencies Are The Way Of The Future
I’m sure you’ve heard the buzz surrounding blockchain technology and cryptocurrency. Some have gone as far as to say that the technology will have as big of an impact on the world as the internet (and, truthfully, they may not be too far off).
So while you may have heard about these concepts, do you really know what they are and how they work? Don’t worry if you don’t … you’re not alone. This article will explain what blockchain technology actually is, and where cryptocurrency comes into play.
The potential for this technology is endless, so now is a good time to start wrapping your head around these technologies.
Read Also: Education Is The Enemy Of Cybercrime
Blockchain
As a rule, our sensitive information is stored and organized on computer hard drives that can be accessed over the internet and monitored by third parties. But as insistences of cybercrime continue to rise, society is growing warry of third-party organizations’ ability to keep their data safe. So, to address this major challenge, we are welcoming blockchain to the scene.
Blockchain is essentially a public ledger for all cryptocurrency transactions. Updated with every new transaction, the blockchain keeps sensitive data more private, secure and decentralized; it also allows users to make safe transactions without any interference from outside entities.
How Does Blockchain Work?
Around the world, thousands of computers are linked to the blockchain. To maintain an accurate record of transactions, each block has a timestamp with a reference to the previous blocks in the network. Every computer that’s linked has equal authority and mutual power with no centralized authority. These connected blocks ultimately make up the blockchain, and it is then replicated across the network cryptographically, making the chain nearly impossible to hack.
Computers connected to the blockchain race to authenticate transactions and create new blocks in the network. These are called ‘Mining Nodes,’ and the owner of the successful computer is compensated through the block reward, a set amount of cryptocurrency agreed upon by the network. After the block is validated using the network’s complex proof-of-work algorithm, it’s closed permanently and holds a connection to prior blocks within the network, making the transaction more secure. Once blocks are added to the network, they cannot be corrupted or removed.
Cryptocurrency
This type of payment is solely online and backed by a network of users who prefer to utilize blockchain technology instead of outside entity or government. Cryptocurrencies rely on the power of online networks to guarantee values and confirm transactions. These transactions are restricted entries in a database that can only be changed once specific conditions are achieved. After these conditions are met, users confirm the transaction and post it to the blockchain where it is then visible to all users.
Even though Bitcoin is the most popular form of cryptocurrency, there are about 1,400 different types of cryptocurrencies available, and they have the following in common:
- Permanence – Once you complete a cryptocurrency transaction, and the network has confirmed it, there’s no way to retrieve it. Transactions are one way and final.
- Anonymity – Anybody wanting to use cryptocurrency can start at any time without any ID requirement.
- Quick And Accessible – Every transaction entry is shown across the network in real-time and confirmed within minutes. This is a public ledger that can be accessed globally.
- Secure – Cryptocurrency is a decentralized processing and recording system, which makes it more secure than traditional transaction methods.
Cryptocurrency looks to be here for the long haul as it’s a more secure way for individuals to store and spend money. This technology is still new with much to understand, but its growing fast and will likely be an important method of payment in the future.
These concepts can potentially impact you and your business. Call me directly at 614.923.6584 or email Rea & Associates if you have any further questions.
By Travis Strong, CISA (Wooster, OH)
Looking for additional security insight? These articles will help:
Passwords: Turns Out We’ve Been Doing It Wrong This Whole Time