Before I get started explaining those 10 things, would you like to know what blockchain is first?
I could try to explain it in layman’s terms, but the World Economic Forum has already done an excellent job of that.
What is blockchain?
Currently, most people use a trusted middleman such as a bank to make a transaction. But blockchain allows consumers and suppliers to connect directly, removing the need for a third party.
Using cryptography to keep exchanges secure, blockchain provides a decentralized database, or “digital ledger”, of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded.
Before we start off. There are many that claim blockchain is anonymous that all transactions remain confidential. Yet blockchain is verifiable and creates a permanent ledger that anyone can check.
Who do you believe? If you plan on using blockchain to remain anonymous, you should probably take another step and be sure. My suggestion is to check out a list of best VPN services and then use one. This way you can be absolutely sure about your anonymity. And a VPN will do double duty and provide an extra layer of security as well.
In these days of Bitcoin and the various cryptocurrencies, you can see why blockchain is playing a bigger role in ecommerce than ever before.
Here are some facts you should be aware of:
1) The Rise of Bitcoin. Bitcoin is the digital money exchange system that pushed blockchain to be what it is today. With more than 8 million users, Bitcoin ballooned in size by 100 percent since 2010. And still, the creator of the service, whether it’s a single person or team, remains anonymous. They function behind the pseudonym Satoshi Nakamoto, but that’s the extent of what’s known about them.
2) Public & Private. Blockchains can be either. Examples of public blockchains are Bitcoin and Ethereum. Being public means that anyone has access, and can participate. Since they are decentralized, no one person is in a position of control over the network, and once the data has been validated, no one has the ability to change it on the blockchain. So, using Bitcoin as an example, anyone anywhere has the ability to submit a transaction, provided they are connected to the network.
A private blockchain operates in a similar fashion. However, access to it is limited, and the database is centralized. So if your goal is to get away from the involvement of third parties when making transactions, a private blockchain is not the option for you. Access to these networks is controlled by someone.
3) As a comparison, today, blockchain is where the Internet was 20 years ago.
4) Keeping with the internet comparison above, currently, only about 0.5 percent of the world’s population is using blockchain but 50 percent of the population is using the internet.
5) Tech giants such as Microsoft and IBM are heavily investing in blockchain technology. IBM alone has allocated approximately $200 million and 1,000 employees to work on blockchain related projects.
6) Tech giants aren’t the only ones investing in the blockchain. To date, Venture Capitalists have invested more than $1 billion in a variety of companies.
7) Just as the internet grew by leaps and bounds, the same is expected of the blockchain industry. The forecasts and projections put growth to a $20 billion valuation by 2024.
8) Banks in North America and Europe don’t plan to be left behind in the blockchain revolution. An estimated 90 percent of them are currently exploring their own solutions.
9) Anyone who has access to a blockchain can see everything in the chain. Every change that is made in the ledger is available to all who have a copy of it.
10) The height of a blockchain’s vulnerability is when it first goes live online.
Let’s focus on those last two points for a bit.
Earlier, I mentioned a question about anonymity and suggested using a VPN if someone planned to use a blockchain for that purpose. When you look at points 9 and 10, do you see an even greater need for some form of security when using blockchain? Even if you were to join a private blockchain, you still have to trust someone else.
Using a VPN will ensure at least 2 things. You have the anonymity you want, and all of your data is encrypted. Using a VPN is strongly recommended when doing traditional online banking, how much more so it should be considered when using blockchain.