The blockchain is something that can change the financial and legal systems of the world as we know it. More and more entities around the globe are adapting to this system and buying into it. The best part is, you and I are easily able to profit off of this. But first, you need to know what the blockchain is, and why you need to invest in it. Let me explain.
What is it?
The blockchain is the most important aspect of cryptocurrency. Everything builds off of it in their own separate way. It is a public ledger containing a chain of transactions between parties. Everyone can see and validate each transaction through what is called a “peer-to-peer” network. This ensures that one person cannot have control over the system.
Block– A transaction between parties. This transaction can either be of currency or information. Each block has 3 vital things…
1). Data– Contains who is sending & who is receiving the transaction. Also, the amount of coin/currency.
2). Hash– A series of code that is so long and complex that you cannot copy or guess it. Unique to each block. (Check the 7 minute video below to better understand hashes)
3). Hash of previous block– The code of the previous block, creating the chain. This allows for the fact that fraud & hacking cannot happen. Since each block contains the information of the one behind it. If someone were to hack the system they would need to validate every single block in history.
Peer-to-peer network– Everyone who is using the blockchain, gets a copy of the chain. Hypothetically, if one block was altered it would have to alter every persons version of the chain. Thus, creating a more secure network.
**The concept of hashes and security is very confusing. Better to be visualized in video. Check out the short videos I linked below, it helped me better understand how crypto is so secure. For now trust me when I say it is secure.
What makes the blockchain so appealing is that no single person/institution can control or oversee transactions. Everyone in the world can see what is going on, and add to the chain. Banks have their downsides of having transfer fees, a cap on how much money can be sent, and issues with transferring funds to another country. Most importantly, bank accounts are more prone to being hacked than the blockchain is.
How does this help you and I?
What fascinates me most about the blockchain is the transaction of information. The transfer of money is good at all, but I see a bigger future that a bank cannot replicate. The transfer of information on the block chain are done so in what are know as “smart contracts.” In short, they are very similar to traditional contracts, an agreement between parties. Conditions must be drawn out, so one recipient gives something, while the other receives.
The example I like using most is this. What if rent payments were done so on the blockchain? The parties would make an agreement and connect their online crypto wallets. At the end of each month value from the tenants wallet goes to the landlords. This is so much better than a traditional contract because what if the tenant just doesn’t pay at the end of the month? Then everyone goes to court, legal troubles happen, and everyone is just unhappy. When the smart contract is agreed upon, there is no backing out, payments WILL go through. And the transaction is there for everyone to view. The landlord and tenant cannot lie and say someone paid or didn’t pay. Then take the other person to court on it.
Ways to invest in blockchain technology
Almost all of cryptocurrency aims to add value to the blockchain, some better than others. Here are the cryptos we value the most regarding blockchain.
Ethereum ($ETH): Chances are you have heard all the buzz around Ethereum before. It is the safest investment on here today. Because it has the second biggest market cap of all cryptocurrency, behind Bitcoin. All Ethereum is, is a network of blockchain. It is home to a giant, reliable, and proven blockchain. Their main goal is the advancement of smart contracts. The most projects and cryptos are built on Ethereum. Institutions like Amazon, Google, and Microsoft have all bought into Ethereum as an investment. They see the use case and store of value in it, you should too.
Check out Etherscan to view all blocks on the Ethereum network: https://etherscan.io/
Chainlink ($LINK): Here I am again talking about Chainlink on this page. Why would I be talking about it so much if I didn’t believe in it? Chainlink is a network that provides accurate data to smart contracts. Like any contract, factual data must be recognized by the parties involved so contracts can follow through. Real people called “nodes” would verify data in the real world so everything can hold true. Microsoft has also bought into this project, planning to use it in the future…
Phala Network ($PHA): I have covered this project before on this blog. Phala aims to make transactions private but verified. Here is the post! https://thecommontrader.wordpress.com/2021/03/03/our-next-crypto-pick/
The concept of the blockchain is extremely complex. There is so much more to the system that I didn’t cover here. Don’t expect to know everything about it from just reading this post. I just wanted to give an overview of something that can truly change the world. Follow the blog for more in depth education on the blockchain, as we will be covering the in’s and outs of it. For now, research it a little more and watch the helpful videos linked below that I watched to first learn about the blockchain.
Buy Chainlink and Ethereum here! https://www.coinbase.com/join/bresci_4b
7 minute video on the blockchain- https://www.youtube.com/watch?v=yubzJw0uiE4
2 minute video on the security of blockchain- https://www.youtube.com/watch?v=5XtvHJbq5kw