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Blockchain: What it is and how does it Work?

The cryptocurrency industry has reached its mainstream status, with more and more people investing in digital assets worldwide. Nowadays, many establishments are already integrating crypto assets into their payment options, adding more easy-to-use payment methods for the customers.

In addition, many Filipinos are investing in virtual coins as they believe that the investment will grow after many years. Numerous international and local crypto exchanges offer bitcoin exchange in the Philippines that are later on stored on virtual wallets. And along with the rise of digital assets comes the popularity of the technology that enables crypto, the blockchain technology.

What is Blockchain?

Blockchain technology is a database that stores electronic data on a computer system. The data are grouped into blocks and chained together before distributing the chain to multiple participants.            When new transactions are made, the data is stored in a new block and then chained to the previous block. This kind of system creates an irreversible timeline of data that makes it hard for hackers to tamper with.

The history of blockchain technology dates back to 1991, when Stuart Haber and Scott Stornetta proposed the use of hash (a new form of identifier) and timestamping in digital documents that will prevent cybercriminals from backdating or interfering. The proposal was not used in any relevant application until 2008, when Satoshi Nakamoto adopted the concept of blockchain to create Bitcoin.

Nakamoto officially launched Bitcoin in 2009 after the first block of Bitcoin was mined, known as the Genesis Block. This breakthrough made by Nakamoto spearheaded the revolution of the cryptocurrency movement and financial technology around the world.

Applications of Blockchain

The most common application of blockchain technology is with cryptocurrencies. Since the introduction of bitcoin to the public, thousands of crypto assets are now available in the market. These virtual tokens are run by blockchain technology that ensures that trading is highly secured and more transparent. Apart from that, the decentralized nature of blockchain allows the crypto market to operate without a central authority.

Because of its wide use in the crypto industry, many people associate blockchain as another word for bitcoin. Those two are different from each other. And with further research and development in technology, blockchain is now slowly integrated into many core functions of various industries.

Financial institutions are now exploring the use of blockchain to improve consumer banking and other transactions. This will ultimately remove frictions between the banks and clients and avoid delays when customers use their services. Pharmaceutical companies are also implementing blockchain to improve the supply chain. Furthermore, insurance services are using blockchain and other modern tools to automate their processes, which helps prevent fraud and streamline essential business functions.

The technology of blockchain in Philippines will see more innovations moving forward as they can provide many benefits to organizations in different industries. For crypto investors in the country, understanding how blockchain works are vital to becoming an intelligent investor. So, if you want to learn more about blockchain technology and how it works, check this infographic from Coexstar.

Blockchain: What Is It and How Does It Work?