What is blockchain?
A distributed database or ledger that is shared among all of the nodes of a computer network is referred to as a blockchain. In a business network, recording transactions and keeping track of assets can be made easier with the help of blockchain technology. It is a distributed and immutable ledger. This means that it stores information in a way that makes it extremely difficult, if not impossible, for the system to be altered, hacked, or manipulated. Wikipedia defines blockchain as “a type of Digital Ledger Technology (DLT) that consists of a growing list of records, called blocks, that are securely linked together using cryptography”.
Blockchain provides information that is immediately shared and completely transparent, also it is ideally suited for the delivery of business information. Blockchain provides a secure, private and decentralized network. This information is stored on an immutable ledger and can only be accessed by members of a network that have been granted permission to do so.
When used as a public distributed ledger, blockchains are typically managed by a peer-to-peer network. Within this type of network, nodes collectively adhere to a protocol to add and validate new transaction blocks.
What is cryptocurrency?
A cryptocurrency is a form of digital or virtual currency that is protected by cryptography, making it extremely difficult to forge or double-spend. Cryptocurrencies are based on blockchain technology.
In the hindsight, cryptocurrency is a data string that has been encrypted and represents a monetary unit. The recording of transactions and the distribution of new cryptocurrencies units is handled by a decentralised network in cryptocurrencies, as opposed to a centralised authority as is the case with traditional currencies.
Bitcoin, Ethereum, Cardano, Solana, and Dogecoin are some of the most popular cryptocurrencies.
The trend of market capitalisation of cryptocurrencies from 2010 to 2022
The adoption trend of blockchain & cryptocurrencies
The blockchain-enabled technologies are observing a huge adoption rate. Be it decentralized finance (Defi), decentralized storage, decentralized autonomous organizations (DAO), NFTs or cryptocurrencies, each application of blockchain is growing by leaps and bounds. However, we believe the technology is still seeing the morning light only and there is more to come.
Euronews reports via Bitstamp survey that in the next ten years cryptocurrency will become the mainstream mode of transactions. The survey size included 28,000 people across different geographies including North America, Latin America, Europe, Africa, Middle-East and Asia-Pacific. Around 88 per cent of institutional respondents and 75 per cent of retail investors believe that cryptocurrencies will be mainstream within a decade.
A 2019 research paper from Portland State University concludes that the adoption of blockchain and cryptocurrencies is dependent upon many criteria that can be grouped into four categories- technical, economical, social and personal. It further comments that the higher adoption of blockchain is due to the following-
- investment opportunities
- lower cost of the transaction
- faster transaction speed
- acceptance by businesses
- technological curiosity.
Australian-based comparison & information services firm, Finder reports that India has the highest cryptocurrency penetration in the world with 29%. After India, Nigeria and Vietnam report the second and third highest cryptocurrency adoption respectively. The US stands in the list at 17th position with 14% adoption and Canada at 20th position with 9% adoption.
Further, businesses are also adopting blockchain technology owing to its benefits. The below diagram shows how the evolution of technology is driving the adoption upward. The Provide platform reports that in 2019 the technology was facing issues related to best practices and standards. And by 2025, the blockchain will become mainstream technology empowering the business by reducing costs, improving processes, building transparency & trust and maintaining data security.