To begin with, let’s discuss about the technology called Blockchain. We can’t deny the fact that the technology behind cryptocurrency known as blockchain has made a great impact in the digital space [just as we’ve seen in the world today]. To gain better understanding of this technology; someone once equate the position of blockchain in the crypto world to exactly what internet means to Google, Twitter etc. So, to put it simply, the technology called blockchain is the driver of cryptocurrency.
Cryptocurrency – as it is known –is a digital currency, which is gradually gaining popularity as a cost effective way of completing payment transactions within the digital terrain. Unlike, the traditional methods, [Banks etc] where transactions passed through centralized authorities. On the other hand, cryptocurrency using the blockchain technology is decentralized. It is neither controlled by a body nor regularized by any centralized authority.
The blockchain technology works with a network of end-users; what then happens is – whenever a transaction takes place as it involves a particular cryptocurrency –the record of each transaction is spread across all the network –the blockchain ensures all records are documented at users’ end [thus] all transactions are seen and approved by all coin-owners of the particular cryptocurrency. For instance, if A, B, C and D are bitcoin users and A decides to pay D certain amount of bitcoins for service rendered, in that light, B and C will be alerted and will have the record of the transaction documented at their end. Also, A and D will be included to host record of the transaction. This is made possible through the Blockchain’s use of Cryptograph.
What is unique about blockchain technology is the opportunity it presented – in this regards – it affords the e-commerce world a new way to effect payment outside the traditional walls of banks [which usually has a centralized authority].
It is worthy of note, [acknowledging the high level of transparency displayed by this technology], that the blockchain allows all records regarding movements of coins and/or transactions to be hosted and accessed by strings of computers – which is equated to the number of users – unlike the banks where records of transactions are stored –mostly –in a central database.
Blockchain [as money] is bigger and better than bank’s money – mainly –because there is practically no transaction limit or payment restriction with blockchain. In the banking system however inflows and outflows of money are subject to approval and it is highly regulated. Also to include, that in the traditional methods; purchasing power of bank’s money is easily influenced by [but not limited to] level of inflation, excess liquidity etc.
The blockchain certainly offers cheaper transaction fees, and every payment initiated reflects on receiver’s end within minutes. Meanwhile, using the traditional method –the most efficient way to move large amount of money electronically is through automated clearing house which could take up to 3 days before it gets approved depending on the nature of transaction.