Why Blockchain is exploding and why you should start now

Blockchain is just one of the most favorite topics in the trends today. Even those who haven’t engaged in cryptocurrency or know how it works are talking about it. But have you ever wonder why blockchain is exploding now?

In a speech during the Consensus 2016 event held in downtown Manhattan, Larry Summers, former US Secretary of the Treasury intimated that:

To top that, he predicted:

You’ve probably already heard of bitcoin cryptocurrencies and the blockchain. In short: this disruptive technology is expected to transform almost every field of human pursuit, so if you’re not in the loop – you better get started.

This post explains the blockchain, its features, importance, and investment opportunities. In addition, this post offers insights and suggestions on how to get started investing in blockchain related products or companies

But what is the blockchain and why Blockchain is exploding now?

Simply defined, the blockchain is a way of keeping track of who owns what.

A blockchain network comprises a digitally chronological and publicly accessible database that keeps track of transactions. As individuals transact within a blockchain network, thousands of networked computers combine their computing power and cryptography to validate each transaction.

Then, as each transaction finishes, it is recorded permanently in a publicly viewable ledger. To ensure the security of the blockchain, the ledger is distributed all over the network, making it impossible to hack or corrupt.

Initially, only bitcoin and cryptocurrency enthusiasts were interested in this disruptive technology.

Back then, its enthusiasts hailed from a libertarian and techno-utopian background. But its versatility has driving blockchain’s widespread acceptance and experimentation in different application areas.

However, being relatively undeveloped its cost savings are offset by expensive development expenses.

Blockchain’s reliance on ledger-based technologies has the financial industry deeply interested in tapping its capabilities. For example, banks are looking to create own cryptocurrencies and self-fulfilling smart contracts for settling financial transactions.

Honduras and Sweden, for instance, have live projects using blockchain technology in processing real estate transactions. Besides that, other initiatives include deployment in the tracing of donor funding to ensure that funds are sent where they are needed.

To illustrate how the blockchain works, here is an example:

Suppose you need to send one bitcoin to Sam.

• To get started, you need to install a wallet on your computer. (Note you do not require to know the intricacies of the blockchain network.)
• After installing a blockchain-based wallet (whether bitcoin or Ethereum), it will generate a blockchain address with more created as per your needs. For the transaction to occur, you need to share your address with Sam to facilitate payments.
• Next, you need to access your computer and enter Sam’s blockchain address along with the command to send one bitcoin.
• Your transaction is broadcasted across the entire blockchain network for approval.
• Once approved, it is included in a block will all other approved transactions creating a permanent “ledger” also known as a blockchain.

With each block representing a transfer of value between wallets, the blockchain public ledger now shows that you have transferred one bitcoin to Sam.

Since the advent of bitcoin in 2008, the blockchain ecosystem has grown exponentially.

As a result, those who invested in this industry have made substantial returns on their investments.

But is the underlying technology all about making money? And is investing in blockchain technology viable today?

Below are three reasons why you should invest in blockchain technology.

Promising ROIs: check out this example:

Let’s say for instance you live in the US and in 2012 you invested $10, 000 in stocks. – Today, you would be worth $12,000 an increase of only 2%.

But if you had invested that same amount in Bitcoin, you would be worth $60,000. To add to that, if you had invested in Ethereum your investment would have grown by 46% that equates to $470,000 for an initial investment of $10,000 within 6 months.

Huge growth potential: most people find the crypto ecosystem intimidating, as it is difficult understanding Gits underlying technology- In turn, many people opt to steer away from it.

However, this fact is a reason why you should get a start blockchain now.

Jumping on the crypto revolution will definitely give you an edge, with respect to speculating and impressive ROIs. With massive coverage, it is expected that the masses will want to get embrace this investment option. For this reason, you should learn more about crypto investments to leverage the power of the blockchain.

The final reason as to why the Blockchain is a good idea, is its decentralized nature.

With it, you can escape from the frustration inherent in centralized banks and strict government regulatory practices. Blockchain technology will considerably decentralize and democratize the global financial system.

We shall not depend any longer on big banks to transfer value at exorbitant fees. With blockchain technology, it is more akin to having your own individual bank where you decide the rules. 

In addition to that, the power of the Blockchain helps align the economic desires of its members

As it makes attacking its infrastructure pointless and resource intensive, it is economically profitable for a participant to utilize resources in mining. Participating in strengthening the blockchain and mining can earn you coins for work done. Being a decentralized technology, the blockchain has an inbuilt capacity allowing almost anyone to participate in its ecosystem.

Today, the rise of interest in blockchain technology is proving a game changer even as you read this article. There has been an explosion in blockchain-based applications that are poised to disrupt the status quo.

Imagine a world where there is institutional transparency in governments or business corporations.

Below is a list of key technologies that facilitate the blockchain ecosystem.

The transfer of information in the blockchain occurs across computer networks. In turn, to prevent the loss of confidential data to a third party, blockchain platforms rely on cryptographic security techniques. Each participant in a blockchain transaction has two keys: a private and a public key.

These keys are used to encrypt information using mathematical algorithms rendering decryption virtually impossible without these keys. Computationally, it is similar to the factoring of prime numbers, which is a simple, mathematical procedure. However, decomposing the result is difficult without prior knowledge of its factors.

Blockchain digital signatures rely on the concept of asymmetric encryption.

In a blockchain, the public key is used to encrypt information. However, any data encrypted with a public key requires the use of a private key known only by its holder. Conversely, privately encrypted information can be decrypted using a public key.

But wait! What is the purpose of encryption within a blockchain if I can decrypt encrypted data using a public key?

Doing so validates the authenticity of its sender. Any data decryptable using a public key guarantees the authenticity of the encryption i.e. the appropriate private key was used during encryption.

Besides that, the originator of publicly encrypted data cannot deny or reject his authorship. In essence, this is the basis of digital signatures.

 An important element of blockchain technology is the hash function: the mathematical processing of numbers. Hashing information results in the generation of a compact summation of this data.

Besides that, generating a hash of any information is statistically impossible to replicate. However, trial and error brute force attacks can replicate a hash that begins with one or more zeros.

 On the other hand, blockchain technology comprises a chain of hashed digital signatures.

To illustrate when you transfer a coin to another address, blockchain software converts a previous transaction into bits, then it combines this bit representation with the receiver’s public key. Next, a hash of all this information is obtained for digital transmission using a private key. In this way, a blockchain validates a transaction’s authenticity while protecting the transaction against corruption.

 Blockchain transactions originate from a block: a record all transactions that have ever happened on its network. Network nodes must process any new block before its official inclusion in a blockchain’s publicly accessible ledger.

This is known as mining and involves the use of computational resources in linking a new block into the last valid block in the chain.

This mechanism is referred to as Proof-of-Work consisting of the addition of a hash field to the contents of the previous block. During this phase, network nodes compete to resolve a new block’s hash entailing the use of tremendous computing resources until the answer is obtained by chance.

Successful resolution of this challenge results in the addition of a block to the chain with the result relayed to all nodes for agreement.

Bitcoin and other cryptocurrencies have been the most overt application of blockchain technology. However, this technology has many more potential use cases other than cryptocurrencies. In this section, we highlight the most popular blockchain use cases.

Banking and Finance: the following industries are increasingly adopting blockchain’s underlying technology.

1.  Capital markets.
2.  Settling of international payments.

5.  Insurance.

1.  Streamline supply chain management.

2.  Ensure the privacy of healthcare data.

3.  Expedite the selling and purchasing of real estate.

4.  Intellectual property rights.

5.  Improve the regulation, compliance, metering, billing, and clearing processes in the energy sector.

1.  Manage public records and identities

2.  Improve voting exercises

3.  Improve tax collection

So Finally: How can you get started with blockchain investments?

Apart from digital currencies, several other blockchain investment instruments are available. You can opt to invest in blockchain startups.

Often these startups employ crowd-funding platforms to raise much-needed capital. An example is BnkToTheFuture, a crowdfunding platform that connects startups with investors. Another excellent way to start blockchain now is to participate in ICOs for new blockchain projects. Today, blockchain companies issue ICOs to project funding.

However, before pursuing these routes it is important that you educate yourself before investing. Various resources are available online to help you do so. Check out this piece for more. Also, this video offers helpful insights on how to invest in the blockchain.

In brief, we have managed to explain blockchain technology, its distinctive features, use cases, and investment options. In addition to that, we have discussed reasons why you should invest in this disruptive technology as well as suggestions for improving your understanding of blockchain technology.

Refrain from investing in blockchain products or companies that you know nothing about. Instead, when investing focus on the long-term gains rather than any short-term benefits. Besides, you should conduct your own research to weed out the hype and confusion surrounding the blockchain ecosystem. Finally, do not be afraid to get involved. The blockchain ecosystem can earn you some impressive ROIs even though you have limited experience.