First of all, it’s important to know blockchain isn’t cryptocurrencies. But in a bid to simply explaining the relationship between these two, we could say blockchain is the underlying technology on which cryptocurrencies operate.
To give a real-world example, we could relate blockchain to an operating system and cryptocurrencies to an application. To use these applications (cryptocurrencies), then they should be installed on an operating system (blockchain).
Though there’s been a battle accepting cryptocurrencies as part of the economy by different countries of the world and also financial regulators, everyone has come to agree on one basic fact; blockchain is the solution. With blockchain, various government and financial bodies could harness its potentials to build applications which will be more favorable to them, unlike Bitcoin and other alternative cryptocurrencies.
Though the focus of blockchain right now is to solve financial problems around the world, it could go beyond that. Blockchain can replace almost every human administered processes in the world today. It could easily take care of tracking products from manufacturers down to the final consumers and also transparently conducting the process of voting in an organization, between a group, or a nation.
The following are just some of the benefits of blockchain to humanity.
Improved Transaction Time and Cost
These were one of its primary reasons for coming into existence. The invention of blockchain has drastically improved how much time it takes to send money from one end of the world to the other. It simply depends on how fast you could pull out your phone and press the SEND button.
Also, the banks were charging a bit too high for services rendered to the public. Blockchain simply was a worthy competitor with commercial banks.
Not only that it took seconds or few minutes at max to send money across the world, but it also costs so little, next to nothing to make those transactions.
Because it’s simply human nature to want to rule over others, thereby making policies or changes that may not really favor everyone or just favoring specific persons and make others so uncomfortable. Blockchain became a better ‘dictator.’ It wasn’t controlled or manipulated by anyone or group. Once the rules were set, then everyone had to follow it. It wasn’t built to favor anyone or change its mind on some issues.
Yeah, we do understand that this has a bad side to it, but the right side outweighs its disadvantages. People are now much safer than before when we had to put our trust in the traditional financial system which had all our records and gives it out at will, without the permission of the owner.
Applications which run on blockchains could easily identify every user using alphanumeric codes. No need for name verification, photo, residence verification, and others unless expressly permitted. This had been a significant advantage of the invention.
The blockchain has its way of recording every transaction made on it; simple recording every activity. What’s more, the records are available to everyone via a block explorer.
With all the benefits mentioned above, and with organizations and the government finding more use cases for the blockchain, we could conclude blockchain is here to stay.