Blockchain, crypto & co.: What does the digital future hold?
Cryptocurrencies are more in demand than ever. Crypto exchanges are booming. When it comes to currencies, blockchain technology also offers great advantages. But what are they?
Cryptocurrencies have a special feature compared to conventional currencies, because the digital currency cannot be controlled by governments, banks or other institutions.
There are already many different areas of application, which will certainly become more and more with a view to the digital future. However, only a few cryptocurrencies can currently convince with a correspondingly high market capitalization. Bitcoin is, of course, at the forefront. It is followed by Bitcoin Cash, Ethereum, Litecoin, Ripple and Dash.
Trading cryptocurrencies is simple and straightforward on the corresponding marketplaces. The crypto exchanges offer users the opportunity to trade directly with each other. The price of cryptocurrencies develops through supply and the demand. The fact that cryptocurrencies are managed in a decentralized manner makes them particularly safe and also extremely attractive.
Blockchain technology is changing the business world
Blockchain technology has a very big potential and it is directly related to cryptocurrency, this is what triggers a lot of the fascination for digital currency.
However, the blockchain is not only of very great benefit to cryptocurrencies, but it could significantly change the entire digital space in the future. It could well lead to entire industries being restructured. A similar change could already be observed in the early 2000s with the beginnings of e-commerce.
Why is blockchain so special?
A blockchain is a database in which information is recorded. It is managed decentrally in a network. Above all, it is managed by many participants simultaneously.
Thanks to the encryption algorithms, no participant can subsequently change or falsify the database. This is exactly what makes the decisive difference to conventional systems.
These are designed in such a way that an administrator is unfortunately always able to change the data retrospectively. This is exactly what is impossible in a blockchain.
The digitized society needs collateral
Digitization is advancing incredibly fast, and with it comes the need for significantly increased security. A guarantee is needed that the digital data cannot be manipulated.
Thanks to blockchain technology, this can now be guaranteed; here, data can neither be changed nor deleted or manipulated. This factor is elementary in the automation of processes.
A participant of the blockchain is self-sufficient
Blockchain technology works in a completely different way than conventional systems. Unlike conventional systems, users of blockchain networks do not need any assistance with their transactions, as is usually the case with platforms or other central instances.
Until now, it has always been the case that people have worked exclusively with central instances, which include banks, stock exchanges or even platforms such as Amazon and the like. Thanks to blockchain technology, the central instances will become superfluous. This will end a whole series of dependencies that we have been accustomed to up to now.
Blockchain and the music industry
Music production in particular is confronted with a gigantic apparatus. In addition to distribution and rights management, there are also the huge labels. In all areas, it’s about managing copyrights and distributing funds.
With the help of blockchain technology, these complex processes could be completely replaced or simplified. In the music industry in particular, digitalization has brought about many changes, just think of the introduction of MP3, Napster or everything to do with streaming.
In the future, it could be possible for musicians to use the blockchain to securely anchor their rights to songs and to settle accounts with all parties involved easily and simply, but above all transparently.
The result would be that neither major record companies nor GEMA would be needed to market or license the music. Therefore, the idea is now being worked on to use blockchain technology to resolve the chaos surrounding licenses and rights.
Blockchain’s impact on banks, PayPal and other financial systems
Much has changed as a result of advancing digitization. Although fewer and fewer letters are being sent, e-mail traffic is constantly increasing. Nevertheless, sending letters is not yet extinct.
Therefore, it is also assumed that neither banks nor PayPal will disappear from the scene due to the introduction of the blockchain. It is much more likely that the industries will adapt to technological progress in the long term and thus not lose their importance entirely.
The user of blockchain technology
The Internet of Things is already showing a strong interest in blockchain technology, because many different applications can work together here as equal partners in a network. This would then also make it possible to network equivalent partners without a central server.
Blockchain technology could also play an important role in the private sector as digitization progresses, because it could, for example, prevent hacker attacks on smartphones.
In addition, the desired goal in the financial sector is, among other things, for payment providers to be able to rely on the blockchain to secure transactions. However, the same applies to smart contracts. For example, the central management of organizations could be governed by automated processes.
For old business models, the new blockchain technology can also mean that they either become obsolete or feel strong pressure to innovate.
Source coverimage: Unsplash / Launchpresso
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