By Zach Scheidt
This post Blockchain appeared first on Daily Reckoning.
Don’t look now, but things are starting to look up for Bitcoin again!
(You can be forgiven if you didn’t realize that Bitcoin was NOT looking up just a week ago.)
You see, midway through December, Bitcoin lost nearly half of its value, falling from a peak near $20,000 to below $11,000 in less than a week’s time. Naturally, such a dramatic decline took a lot of the excitement out of the cryptocurrency market.
Incidentally, my little brother jokes that he’s one of the only people in the world who has actually LOST money in Bitcoin, as he waited to get into the market until the day before Bitcoin hit its all-time high.
This past week, Bitcoin started moving higher again, and has recouped about half of its fateful December loss.
Given the number of questions we’ve received about Bitcoin and cryptocurrencies here at The Daily Edge, I wanted to cover some of the ways responsible investors can make money on cryptocurrencies — or more accurately, on the blockchain technology behind the cryptocurrency action.
Let’s take a look at what’s going on!
What’s the Deal With Blockchain?
A few weeks back, we asked for your feedback on what we cover here at The Daily Edge. The overwhelming majority of you mentioned that you would like to know more about Bitcoin and other cryptocurrencies.
More specifically, there were a lot of good questions about how blockchain (the technology behind Bitcoin) works, and how we as investors can make money from this technology.
You may already know that I’m not a big fan of “investing” in Bitcoin. The currency is highly speculative and volatile, and at this point it’s unclear whether the currency will actually be worth anything in the long run.
(Yes, I know there are many of you who heartily disagree with me. And that’s certainly okay. Suffice it to say that I’m not opposed to people speculating on Bitcoin with extra cash that they don’t need immediately. But I wouldn’t bet money that you need on Bitcoin today.)
Blockchain technology, on the other hand is a very important tool that will change financial transactions forever.
If you want a detailed explanation of how blockchain works, I would highly recommend an article from blockgeeks.com which you can find here.
Basically, blockchain is a technology that keeps a set of secure online records that is spread across many different computers. This is important because no single location is responsible for the set of records.
You could compare blockchain to a giant Google Doc or Google Spreadsheet that many different people can access all at once. So when one change is made to the blockchain, everyone has access to that change at the same time.
Since blockchain records are spread across many locations, it’s nearly impossible to hack into the database. That’s because you would have to simultaneously hack into all of the computers to change the database of records. So blockchain has developed a reputation for being very immune to hacking or false …read more
Source:: Daily Reckoning feed
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