Blockchain technology and cryptocurrency are gaining traction. The birth of Bitcoin gave prominence to blockchain technology. While both terms are synonymously exchanged time and again, they are independent in nature. Blockchain is the technology, while Bitcoin or crypto is the original product created to utilize the technology.
There’s a growing number of cryptocurrencies, but the Bitcoin Satoshi Vision, or simply Bitcoin SV, is true to its existence of a global chain of transactions to ensure economic progress and security. The blockchain technology that Bitcoin SV uses provides a more stable, secure, and reliable platform for digital currency.
An Introduction to Blockchain
What is blockchain, and how does it help pave a cashless and efficient way of exchanging currency? Apart from cryptocurrency, are there other transactions that can be processed?
From a literal sense, blockchain was first described in 1991 by Stuart Haber and W Scott Stornetta as a “cryptographically secured chain of blocks.” In 1998, Nick Szabo designed a decentralized digital currency called “BitGold,” but it was too forward for its time and never saw the light.
This became the precursor to Bitcoin in 2009, when Satoshi Nakamoto finally implemented the first blockchain as the public ledger for transactions and reaped massive success. In 2014, blockchain technology evolved from being just a mere system for financial transactions as applications beyond digital currency were explored.
Everyone wants to get on the express train that is blockchain technology, but how can it be utilized and how to use Bitcoin as an investment?
How does blockchain work? First, its chain of blocks is distributed via a peer-to-peer network that links many computers and enables users to make digital transactions. To ensure the safety of the transaction and communication, each block is protected with codes using a cryptography method.
A consensus algorithm that only previous blocks can read and solve protects the blockchain. Cracking a code or altering or tampering with a block is impossible because the entire block in the network needs to accept the changes you made in a process called “proof of work.”
This new set of information will then be stored in the next chain of blocks, and every block in the network needs to acknowledge the changes.
The beauty of Bitcoin SV’s system is that it is open, public, and decentralized. It means no central governing body oversees the ledger of transactions. Many blockchain technologies evolved from the original concept.
5 Blockchain Investment Trends
Since its inception, blockchain technology has come a long way, and it will continue to evolve. Here are some of the investment trends that will shape and shake blockchain technology in the years to come.
1. Growth of Global Blockchain Market
Competition in the industry levels up the playing game for everyone. When the world was introduced to blockchain, businesses showed interest in adopting the technology to streamline their processes.
According to Finextra, Global Blockchain Market Size is expected to reach USD 39.7 billion in 2025, with a Compound Annual Growth Rate of 67.3% for a five-year period beginning 2020.
2. The global pandemic will accelerate blockchain transition swiftly
As the world grapples with the pandemic’s raging effects, businesses will have to adapt to a faster turnaround time to deliver. Some of blockchain’s key features include tokenization, smart contracts, and decentralized consensus, and these will play a key role in smart and pragmatic business day-to-day operations.
Some business projects that can benefit from blockchain include supply chain, startups, web hosting, among others. Digital transformation is essential for business longevity. Implementing blockchain technology at various projects can make dramatic progress in a short amount of time, increase productivity, and help innovate.
3. Banking and Financial Industry to lead the adaptation of blockchain technology
With social distancing measures still in place, contactless transactions will be the new trend, and the banking and financial sector will be at the forefront of this development to meet the customers’ needs and demands for timely and efficient digital transactions.
The redesigned financial services will remove the bureaucratic process and is expected to show exponential growth in blockchain technology adoption.
4. The rise of private blockchain or enterprise blockchain solutions
Remember that blockchain is rooted in the fact that the information and transaction are shared in a public, peer-to-peer network. In the coming years, private blockchain will dominate the market as corporations focus on utilizing blockchain for business-to-business cases.
Having a private blockchain entails having high security levels, efficiency, and privacy that will be known and accessed by a select group of individuals within an organization.
5. Investors diversifying their portfolio into cryptocurrency
The rising political tensions between China and the U.S. made concerned investors look for stable ways to protect their stocks, prevent their assets from being frozen, and keep central banks off their money by considering cryptocurrencies as a wise investment opportunity.
Since cryptocurrency is decentralized or not regulated by a government or monetary institution, Bitcoin grew in China, registering 65% of Bitcoin’s global hash rate as of August 2020. Chinese investors have preferred it next to stocks, funds, real estate, and more.
A powerhouse economy such as China may determine the course of economic progress and transactions. China is already starting to transition into the digital yuan, utilizing a part of the blockchain technology. The digital RMB (DCEP) program launched in Suzhou adopted some, if not all, blockchain functionalities, but not yet fully decentralized.
Other countries are developing their own cryptocurrencies, such as Venezuela and Argentina. Should other nations follow, central banks cannot regulate the cash flow in the economy.
Developing countries will be on a level playing field to increase their economic standing thanks to cryptocurrency, and institutions will have to think of ways to coexist with blockchain.
Looking into the Future of Blockchain
As a decentralized system that operates autonomously, not even its founder or developers can question blockchain technology’s veracity. It is immutable and tamper-proof, and that makes it efficient.
The spike in digital wallet usage and the need for an efficient digital payment system catapulted blockchain to be adapted by global enterprises and used by people who believe that cryptocurrency is the future.