From Bitcoin and blockchain to smart contracts and cryptocurrency exchanges, the global economy has changed dramatically over the last 10 years. Here we talk about the importance of some of the changes seen over the last few years and how Wisebitcoin is setting the stage for a new era of crypto trade and investment for a new wave of retail and institutional investors.
If you’ve been following the cryptocurrency sector over the past few years, you know that blockchain technology is somewhat synonymous with Bitcoin. However, it is important to understand that although blockchain technology is what makes Bitcoin possible, blockchain itself is a technology with a wide range of uses and applications. It has quickly gained substantial traction in many sectors across the global economy and is changing the way the world works for the better.
To appreciate the impact that blockchain can have on the world, it is important to first understand what blockchain technology is and how it works. Here we talk about blockchain and smart contracts from the ground up: what they are, how they work, what the technology is doing today, the industries it has the potential to disrupt, and why there is so much buzz and so much promise around decentralized and crypto-powered solutions, particularly in the decentralized finances and fintech spaces. We also talk about the role of Wisebitcoin in powering the decentralized financial ecosystem of the future.
What Is Blockchain Technology?
A blockchain is a connected string of data blocks that contain specific types of information. Cryptography, which is math-based security, is used to connect each block with the previous and the next block. This forms a chain of blocks that cannot be tampered with. Blocks and the security protocols that connect them must be tamper-proof to ensure the integrity of data, preclude any possibility of fraud, and allow for audits of trades, transactions, and data stored on the blockchain.
Blockchains usually contain information that is one of three types:
- Transaction information, such as dates, times, and amounts.
- Participant information, such as IDs and signatures.
- Hash data that separates each block from other blocks.
Blockchain technology provides an elegant solution to record and store information that is transparent, auditable, and tamper-proof. With cryptography, it is virtually impossible to falsify a block on the blockchain or undoing a transaction once it has been confirmed.
Cryptocurrencies are blockchain-based solutions that are changing the way the world does business. They can deliver scalable, low-cost, tamper-proof, and transparent solutions to the world. Such systems have already found widespread use in countless industries, from music and IP licensing (think Spotify), shipping and logistics (Maersk), power production (Siemens; SunContract), HIPAA-compliant health records (PTOY and SimplyVital Health), and countless matchmaking services of every imaginable type (dating services, rentals, jobs, and more using Matchpool). The list goes on and on, and the way they work is quite simple, as detailed below.
How Do Cryptocurrencies and Blockchain Technology Work?
Blocks of data are added to an existing chain as follows:
- A transaction takes place.
- The transaction is verified and confirmed.
- Once confirmed, all of the data in the block is formally added to the chain.
- Special cryptographic protocols called consensus algorithms are used to create the mathematical security code that secures the network and connects the block to the preceding and the next block.
Once a block is added to a blockchain, it can be reviewed and audited by anyone. This in-built transparency is one of the features that has allowed blockchain technology to transform industries as disparate as healthcare, education, government, entertainment, financial services, supply chain, transportation, and more.
Blockchain’s Impact Factor
Blockchain is often thought of as having been built for cryptocurrencies but it has found a wide range of applications in many different industries, particularly in the financial services sector. For example, the emergence of projects such as Ripple and technologies it uses such as RippleNet are currently being piloted by banks for cross-border transactions that are fast and cost-effective.
In the same way, blockchain can be used in logistics to follow the movement of products from one point to another and to track operations, design fleet routes, handle changes in demand or supply, and more.
Other applications of blockchain tech in different industries include:
- Healthcare – Using the blockchain to store patient data and reduce data entry issues, improve patient health outcomes, and prevent data breaches.
- Real estate – Digitizing illiquid assets and selling them to thousands of investors who otherwise would not be able to afford an entire asset or piece of property.
- Legal industry: Automatically settle or execute agreements with smart contracts to ensure the security of rights and property and reduce fraud and the costs of oversight and doing business.
- Advertising and content creation: Effectively raise advertising revenue, deliver customized experiences, help content creators manage content ownership, and eradicate copyright infringement.
In addition to these examples, blockchain has found uses in many other industries such as insurance (to reduce fraud and automate claims), crowdfunding (to raise capital and return funds if goals are not met), government (to create and manage low-cost databases with customizable access), and politics (crypto fundraising for candidates).
The key features of the decentralized systems that are built on blockchain technology are as follows:
Blockchain-powered systems are decentralized. No single entity owns, controls, or manages the system. Google controls and has access to the data of people who use Google services. Facebook controls and can access your Facebook social data. The same goes for Apple, Twitter, Amazon, and other businesses that own and provide centralized services. On the other hand, decentralized apps, or DApps, run on rules that are written in code called smart contracts. These contracts execute specific actions when specific conditions are met with no need for human intervention. This is a simple yet powerful feature that completely changes the landscape of what DApps can do that traditional systems cannot.
Next, DApps run on transparent code. Anyone can browse the blockchain to see its code and can audit transactions recorded on it. As such, decentralized DApps are also censorship-resistant. Once something is recorded on the blockchain, it cannot be undone, removed, or deleted.
DApps are designed from the ground up for a global audience. All you need to access or use them is an internet connection.
Low-Cost Entry and Use
There are low barriers to entry. Anyone can create a DApp, and anyone can use them. Many DApps charge fees that are near-zero for services that can be hundreds of times higher using traditional, centralized systems. Think of a wire transfer for $30 versus a blockchain payment for a few cents.
DApps are flexible because the smart contracts they run on are programmable and flexible. Many smart contracts are like freely accessible blocks of code that you can use to build your own app. If you don’t like something, you can change it or customize an existing DApp for your specific needs.
DApps enjoy a great deal of interoperability and can integrate with other systems and solutions, which make them perfect for connecting otherwise disparate systems and services based on the user’s needs.
DeFi – or decentralized finance – is the moniker given to financial DApps that run on the blockchain and/or cryptocurrencies. The DeFi revolution we are currently seeing is because of the robust, low-cost fintech solutions running on the blockchain that have been developed for everything from online money transfer, cross-border payments, and access to liquidity funds, to investments, savings, trade, insurance, loans, and collateralizing physical assets and digital tokens for investment purposes or otherwise. With so many benefits to smart-contract-powered systems as outlined above, it is no wonder that many projects have been launched to bring these benefits to the financial space. That is what DeFi is all about.
How Smart Contracts Work
Let’s take a step back and ask ourselves how all of this is possible. We talked about smart contracts above. Smart contracts are simply programs that run on the blockchain. They can perform specific actions when specific conditions are met. For example, let’s suppose John hires Jack to write an article. Instead of manually waiting for Jack to submit his article and then approve payment – which can take time and would require John to monitor the status of his arrangement with Jack – John can use a smart contract that says:
“IF article is submitted, THEN release payment.”
Developers and programmers can build highly sophisticated applications in this way that run automatically when predetermined conditions are met. These applications are DApps, and they provide a simple yet elegant, programmable, and powerful way to automate anything imaginable based on what it is you aim to achieve.
Many DeFi DApps require you to use Ether tokens to use them. This has given rise to a unique metric for the DeFi space – the amount of Ether locked in DeFi applications. In February of last year, there was about $1 billion locked in DeFi smart contracts. At the end of last year, there was almost $14 billion locked in DeFi smart contracts – a growth rate of 1,300%.
Much of the growth and interest in this space has been a combination of the maturity of the crypto space as a whole, better integrations between financial services and the blockchain world, and more favorable KYC and regulatory rules that have helped many DeFi and fintech projects get off the ground. We talk about the role of Wisebitcoin within this context below.
Wisebitcoin and the Cryptocurrency Boom
Blockchain started as a way to secure transactions on a network but today has found considerable traction in many different industries and is being used to lower operational costs, improve efficiency, ensure transparency, and reduce time-to-market. Important obstacles in the adoption of blockchain and cryptocurrencies, however, are a lack of education, compliance issues, and access to the tools and services that can help people make fair, fast, and favorable investments.
Although the crypto space has matured very quickly over the last few years, DeFi is still somewhat in its infancy. However, the ripple effects of more familiarity of the public regarding decentralization, cryptocurrencies, and how such systems can meaningfully change the world have spilled over into the DeFi space. It is only a matter of time before different DeFi projects – with their inherent transparency, security, and fairness – change the world of business and finance as we know it.
Cryptocurrency exchanges have been an integral part of this evolution by connecting retail and professional traders to the projects, liquidity, and opportunities needed to power growth and value-added across the blockchain/cryptocurrency spaces and beyond. However, the issues of user education, ease of access, security, and performance plague too many exchanges, preventing millions of potential users from enjoying the many benefits that Bitcoin and cryptocurrencies have to offer.
This is where Wisebitcoin comes in.
Wisebitcoin is a decentralized global exchange for professional traders. It offers spot trading services for over 50 currencies and is managed by a multicultural team of over 50 specialists. Wisebitcoin is redefining the cryptocurrency and digital asset trading spaces. With secure and performant cryptocurrency services for the traders of the future
Wisebitcoin recently welcomed Shadi Abdou to the Wisebitcoin Advisory Board, as well as Andrew Chae and Sangwook Lee, who together bring forex, compliance, customer service, and operational expertise to the Wisebitcoin platform.
Wisebitcoin was designed to provide users with a secure, optimized, and performant trading experience. It is a flagship one-click trading-enabled platform for web and mobile and is part of a global cloud network of 280 cryptocurrency exchanges that handle over $6 billion in daily trades and provides over 15 million active users with access to the cryptocurrency trading space.
Some of the features of the Wisebitcoin platform include:
- Fast transaction times (up to 2.3 million TPS for single-pair trades)
- 100X leverage on contract trading
- 24/7 live phone support
- Performant and scalable cloud infrastructure
- Affiliate programs
- Deep liquidity
- User-friendly interfaces
- Native mobile apps
- Insurance-backed asset protection
- Spot and futures trading
- Education, research, trading tools, and analysis resources
Wisebitcoin has partnered with many of the leading brands and thought leaders in the cryptocurrency and decentralized financial services spaces to bring enterprise-grade trading and security to users from all backgrounds and the platform is pushing forward with its commitment to providing users with the services, education, and access they need to enjoy the benefits of inclusion in the decentralized financial services space.
To open an account or learn more about how Wisebitcoin can help you regain your financial independence, please visit Wisebitcoin.