Blockchain: Everything you need to know

Blockchain: Everything you need to know

Blockchain has been around for over a decade and more and more industries are discovering the technology on their own. In addition to optimizing business processes, technology should provide all parties with real-time insight. Acceptance into the ranks of international consortia as well as startups is high. But many ideas and potential application areas are still in their infancy. What exactly is this technology and how to build the bridge to the Bitcoin crypto asset?

What is a blockchain?

In simple terms, the blockchain acts as a decentralized database that allows transactions to be carried out over the Internet in a secure, verifiable and tamper-proof manner. Thus, it provides a cryptographic method to distribute data and record transactions with an immutable property or
Identity documents In addition to its excellent encryption technology, blockchain is characterized by the dissemination of data over a network of computers.

Application areas of blockchain technology

The range of applications of blockchain technology is diverse. Usage can make a lot of sense if the information is to be publicly available and cannot be changed later.
Many companies are currently working on applications of blockchain technology, such as digital land registers or commercial registers. Blockchain proponents are convinced that the use of technology can change our society. The following is intended to show how blockchain technology can be used in everyday life.

Blockchain Technology Use Case: Food Safety Trust

Logistics is considered a predestined application area for blockchain technology. Incoming and outgoing goods could be automatically written as a transaction in the underlying blockchain, so that there is automated control and monitoring of the supply chain.

Blockchain is also suitable for disclosing processes in the field of logistics in a publicly accessible network, in particular to create transparency. Farmers, producers, suppliers and above all consumers could particularly benefit from this.
Thus, for example, signed and therefore reliable information such as the origin and/or the state of food could be made public, which would at the same time create trust.

… the technical vision of blockchain technology

Any party with internet access and computing capability can access blockchain technology and use it accordingly. The application itself is based on what is known in technical jargon as an “open source model”. In case of discrepancies, such as interruption of the cold chain, all parties can receive a notification so that they can understand which product is affected.
Products can be clearly assigned using special information such as

• the origin of the company,
• Batch number,
• expiration date.

Grocery stores and other members of the network can trace spoiled products back to their origin and take appropriate action.

Transparency also for the end user

The fashion industry could also discover blockchain technology on its own. In addition to information about the materials and their origin, it is particularly interesting to know whether the product is counterfeit.

The bridge to crypto assets like Bitcoin and Ethereum

Bitcoin is often mentioned in connection with hacker attacks or criminal activity. But in some countries, like El Salvador, Bitcoin even acts as an official means of payment. Note that Bitcoin is not a recognized means of payment in most nations and has therefore not been able to impose itself on this point to date. Blockchain acts as the underlying technology behind Bitcoin and Ethereum and the majority of crypto assets.
The technology was also able to achieve its first big hits away from Bitcoin. Strictly speaking, it was not Bitcoin but Ethereum that was able to truly unleash the potential of blockchain technology in combination with smart contracts. ^{1 2 3}

What is your opinion on blockchain technology?

Whatever your view, today you can via IG’s world-class trading platform* Contracts for difference (CFD) trade in both rising and falling markets. CFDs allow you to take a position in cryptocurrencies without direct investment.*

Please note the following risks:

CFDs are complex instruments and come with a high risk of losing money quickly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You need to ask yourself if you understand how CFDs work and if you can afford to take the high risk of losing your money.

To buy (long) or sell (short) a company’s stock, follow these simple steps:

1. Create a IG trading account or login to your existing account
2. For example, type ‘(Bitcoin)’ in the search bar and select it
3. Choose your post size
4. Click “Buy” or “Sell” on the transaction ticket.
5. Confirm exchange

*Awarded “Best Trading Platform” at the ADVFN International Financial Awards and Professional Trader Awards 2019. Awarded “Best Trading Application” at the ADVFN International Financial Awards 2020.

Sources:

1. Research Emden, 2022
2. IBM, 2022
3. Daily News, 2021