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  • Writer's pictureScott Richter

What is a blockchain?

They. Are. BLOWING! UP! Cryptocurrencies, that is. You’ve probably heard a lot about Bitcoin over the years, and more recently, you’ve likely heard about Dogecoin, as well. But there are literally thousands of other cryptocurrencies, too. And most of them are based on a technology known as ‘blockchain.’ There’s little doubt anymore that blockchain technology will be a game-changer. But what is it, exactly? That’s what this blog post is here to explain, and more importantly, after you know what it is, I’ll let you know how you personally could profit from it.

In a nutshell, a blockchain is basically an electronic ledger that records all transactions in a given ecosystem. So, for Bitcoin, its blockchain records all Bitcoin transactions, ever, since Bitcoin was first created. Most blockchains (including Bitcoin’s) are decentralized, transparent, and offer layers of privacy. This is why so many people favor blockchains as an alternative to other traditional payment or transaction systems that are more closed. Even many of the harshest critics of Bitcoin and other cryptocurrencies still recognize the value of the blockchain technology that backs them, especially because blockchains have other applications outside of Bitcoin and cryptocurrency.

Some have said that Bitcoin has no intrinsic value. But what if there was a different digital currency, that also used blockchain technology, that was created by the IMF and backed by its members’ reserves? Wouldn’t this have a far more credible standing in the digital marketplace? Personally, I’m quite confident that blockchain applications will likely be one of the next big disrupters to the financial services industry. For example, currently, it takes two trading days to settle a stock transaction. But blockchains could make same-day settlements possible, and perhaps even instantaneous settlements. Unquestionably, this would transform how brokers/dealers run their back offices.

And that’s just the tip of the iceberg. What about the real estate industry? If a decentralized ledger of real property can be tracked in a reliable and transparent manner, the need for title searches and insurance could go by the wayside. And these are just a couple of examples of how this new technology could become a transformative force in our world.

So, what’s the importance to you, the savvy trader/investor, outside of just buying up cryptocurrency? Well, Bitcoin and the rest of the cryptocurrencies need massive computing power to run blockchain software. That’s what really matters to money makers! Semiconductor companies making very powerful graphic processors, for example, could blow up directly due to interest in blockchain-backed industries. So then, money makers, if you keep your ear to the ground on cryptos and blockchain-related technology companies that serve as their backbones, you have the potential to do very well with investing.

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