The Basics of Blockchain
Written by John Butler
Posted March 9, 2018
So, what exactly is a blockchain?
In 2017, this turned out to be a multibillion-dollar question. Investors rushed to invest in blockchain technologies, pouring money into what is now the booming digital currency market.
In this investing frenzy, the term "blockchain" became a buzzword. Like Bitcoin, it was often accepted by people who didn't have an understanding of the underlying technology. It was easy for investors to ignore the technical details when profits were basically raining from the sky.
Today, we're living a different blockchain story...
The hype surrounding digital currencies has come and gone. In its wake, thousands of digital currency companies have taken flight. Many of these companies have long-term values, but others will eventually fail.
Today's digital currency investor can't ignore blockchain any longer.
Of course, you don't need to know all the minute technical details, which are usually only braved by computer science whiz kids. But a basic understanding of the technology and its potential application can help investors in making good decisions within the blockchain space.
And that's why we wrote this resource page. In this report, we cover the following:
- A brief technical description of blockchains.
- A few examples of how blockchains function.
- Projected market growth for blockchain technology.
After reading this resource page, we hope you'll feel better informed when making decisions about companies within the blockchain space...
The Technical Basics of Blockchains
Before we dig into the various applications of blockchain technology, we want to cover some of the technical aspects of blockchain software.
In the simplest of terms, a blockchain is a distributed database used for storing information.
If you're trying to picture it, think of it as a giant jumbled spiderweb with no central point.
Information is scattered across the network, keeping it safe from malicious DDoS attacks. Encryption is also used to secure the information.
Blockchains can be both public and private.
A good example of a public blockchain is Bitcoin. Everyone has access to the Bitcoin blockchain. And all the transactions that take place on it are public. An example of a private blockchain is the IBM blockchain, which was developed by the IBM company as a software product to market. In this case, IBM controls the blockchain.
Blockchains can also be centralized or decentralized. When a blockchain is decentralized, it lacks a central controlling entity.
A good example of this, once again, is Bitcoin. A centralized blockchain is a blockchain swayed by a central entity. A good example of this is Ripple, which is moderated and controlled by Ripple Labs.
What you just read was a lot of technical information.
This technical information is valuable. But it doesn't really answer the real question: Why does a blockchain have value?
The truth is that blockchains derive value from their unique functions, which is truly unlike anything we've ever had before...
How Blockchains Function
To better understand how blockchains function, let's look at the needs they fulfill.
In today’s world, we exchange things all the time. However, in order for those exchanges to take place, one of three things needs to happen: the individuals exchanging the item or data need to trust each other, engage in a legal contract, or involve third parties.
In each of these cases, there are usually complications — including excess expenses and wasted time.
You can think of blockchain like the fourth option. It allows individuals to exchange things without having to go through a third party or waste time.
Now, let's look at an example...
A good example of blockchain technology, and maybe the best known, is the Bitcoin blockchain. Many investors have realized that the Bitcoin blockchain is public and that the exchanges on it are public to everyone. When individuals move money through the Bitcoin blockchain, there's a record of the transfer. The transfer is also safe and secure.
Other blockchains have taken the Bitcoin model a step further. A good example is the Ethereum blockchain, which allows users to deploy smart contracts. What that means is money will only move between individuals if certain parameters are met.
There's immense value in this kind of tool — enough to attract the attentions of Fortune 500 companies.
All over the globe, companies have turned to blockchain to help in bettering their businesses, making things easier for customers, and developing efficient processes.
All you have to do is look at some of the companies in the digital currency space. Many of these projects are attempting to revolutionize the internet. And they're making investors a pretty penny in the process.
And now is the time for investors to be paying attention. Over the next few years, the blockchain sector is expected to grow dynamically.
Investors can expect to see profits from both public market companies working with blockchain and continued profits generated by the digital currency market...
The Growth of Blockchains
In the next handful of years, the blockchain sector is expected to grow dynamically.
In a recent report, Netscribes estimates that the global blockchain market will surge at a compound annual growth rate (CAGR) of 42.8%. That's incredible growth, especially when you compare it to the growth of other technology mega-trends. Blockchain estimates outflank both the artificial intelligence (AI) market and the augmented reality (AR) market estimated CAGR over the next four years.
The total value of the blockchain market is expected to surpass $13.9 billion by 2022.
Investors should expect to see increased use of blockchain in the financial sector, which is already leading the blockchain charge.
Companies are also expected to turn to blockchain in order to secure customer data, which has traditionally enticed identity thieves and put customers at risk.
Blockchain can benefit many industries, including AI, cybersecurity, fintech, and health care. More importantly, while we head toward adopting the internet of things (IoT) network, blockchain will have a big role to play, providing seamless interaction between a global audience and machines. Blockchain technology is currently dominating the realm of cross-border payments, fueled by use from companies like Ripple Labs.
Many large companies are already looking at blockchain technology — the most notable being IBM. Another major name in the space is Microsoft.
Over 150 corporations, including dozens of Fortune 500 companies, are already working with the Ethereum blockchain. And those companies have formed an alliance called the Ethereum Enterprise Alliance (EEA).
No matter what angle you look at it from, blockchain is preparing to make some major moves in the coming year.
We'll be closely monitoring those moves here at Token Authority. And we'll be keeping investors up to date through actionable investment research. Our goal is to find the blockchain projects that cater to emerging industries, whether it's IoT or cybersecurity.
And we're excited to have you along for the journey! If you haven't already, make sure to subscribe to our free Token Authority e-letter for timely updates on the blockchain space.
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For Digital Currency, 2017 Was a Landmark Year…
The price of Bitcoin, the world's first digital asset, soared. And that turned many first-time investors into millionaires within a matter of months. Beyond Bitcoin, other digital assets also gained national attention and the support of massive corporations like Intel, Microsoft, and IBM.
But today, investors are looking at a different digital currency landscape…
A whole new wave of valuable blockchain companies is giving investors a second chance at Bitcoin-level profits.
At Token Authority, our goal is to provide investors with the actionable research and news that they’ll need to profit from this groundbreaking market. Sign up below to receive our free e-letter and a report detailing the top three digital currencies that you should be keeping an eye on in 2018.Sign up to receive your free report. After signing up, you'll begin receiving the The Token Authority e-letter.