The initial value of a bitcoin, set in the year 2010 was less than 1 cent, seven years later, it has crossed $19,000. Despite coming to public recognition only in 2013, the original cryptocurrency bitcoin was created by an anonymous cryptographer (or multiple cryptographers) in 2008, known only by a pseudonym.
Despite the keenness around Bitcoin initially dwindling down due to governments worldwide refusing to acknowledge the cryptocurrency, steps have been taken for wider acceptance of the bitcoin. In the latest of news, future trading in bitcoin has now commenced on two of the largest US exchanges the Chicago Mercantile Exchange (CME) and Chicago Boards Option Exchange (CBOE).
As many warnings say perhaps the recent price surge is a bubble. Or not, maybe it is a belated recognition by the financial community that cryptocurrencies like the bitcoin are going mainstream. Regardless of what happens in the future, it is high time to nail down what exactly is bitcoin and what is blockchain technology.
Essentially, blockchain is a distributed ledger, it's a shared database. Rather than records existing in one location, they are shared across computers in the network all over the world. Built into that ledger is a consensus mechanism that allows anybody to interact or do business with each other and to trust each other without having to go through a central intermediary.
To get a more detailed insight on why the blockchain technology is tranformative, watch video:
Like we have the internet of information, Blockchain is the 'Internet of Values'. Blockchain technology has inherent characteristics of being a decentralized, trust-less, immutable consensus network that sets it apart.
Blockchain has the potential to change the way we interact with each other and with centralized third parties forever, simply because we do not need them with this system.
It creates a permanent and unalterable record of every transaction. Once you have agreed on a transaction and recorded it, it can never be changed. You can subsequently record another transaction about that asset to change its state, but you can never hide the original transaction. This makes the technology highly immutable.
Another feature that makes blockchain stand out of the crowd and showcases it as one of the prime time technologies is its security. Blockchain has not been hacked as of yet; and practically, it cannot be. This technology uses public and private keys to secure the blocks created on the ledger.
The mechanics of the Blockchain are novel and highly disruptive. The transactions don't even need to be financial in nature. It can be anything from data shared, through to messages sent anything that requires two people transacting. For this reason, blockchain is a potential game changer.