Last updated on May 7th, 2020 at 11:32 am
We have witnessed the emergence and rapid rise of cryptocurrencies to their position today in the mainstream. While some investors may still be a little bit skeptical about these digital currencies; there are several reasons experts believe that they are going to be here for a long time.
The people who were brave or insightful to invest their money in these digital currencies at the beginning many of cryptocurrencies have seen a massive return. Today, most people have stopped asking the question if it is safe to tie up their money in this digital investment. They are more interested in understanding the concept of cryptocurrencies and how they work.
In this post, we will take a quick look at the unique technologies propelling cryptocurrencies.
THE CONCEPT OF CRYPTOCURRENCIES AND HOW THEY WORK
It doesn’t matter if you intend to build a cloud mining website or invest your cash in cryptocurrencies; understanding the concept of these digital currencies and how the technology behind them works is imperative.
One of the reasons for this is that this knowledge equips you with the information you need to avoid becoming a victim of the various criminal activities that sour the world of cryptocurrency.
The Concept of the Technology of Blockchain
Cryptocurrencies rely on a unique and sophisticated technology commonly referred to as the “Blockchain”. Although, we are unable to trace the exact origin of blockchain technology, an organization called “Satoshi Nakamoto” is believed to have been involved. Blockchain technology came to the fore in 2009.
The objective of creating this technology was to aid anonymous, digital fund transfers between two people. This implies that both parties should be able to send and receive money without risking the exposure of their identity.
In other words, there is no third-party oversight of any transaction carried out through blockchain technology. At its early stages, the goal of the blockchain was to allow, release, and document cryptocurrency transactions.
Is the Blockchain Technology Incorruptible?
From the moment blockchain technology was released; it has evolved and thrived in the digital world. Some people even refer to it as the “new internet”. This technology helps in facilitating digital information transmission. The best part is that it eliminates any fear that the data stored can either be duplicated or modified.
According to two blockchain experts and authors, one of the most significant features of blockchain technology is its resilience. They refer to it as a “digital ledger that will record most futuristic economic transactions”. In one of their books, they went as far as stating that the technology depended on by the blockchain is incorruptible.
They concluded that blockchain’s ability to document data goes beyond financial transactions. Their research indicated that anything that has value can be recorded on this same technology.
Is the Blockchain Technology Safe?
To help you understand this concept, imagine a room that has dual keyholes. These keyholes need to be opened by two people at the same time. This means that a single person cannot open the door to the room alone whenever he feels like it. This same concept applies to the blockchain technology.
The technologies propelling the cryptocurrency concept are reliable, effective, and decentralized.