Feb 3, 2019 01:30 UTC
Feb 3, 2019 at 01:30 UTC
Blockchain, Cryptocurrencies & ICOs – What’s the Relation?
Blockchain Technology is a decentralized form of the network where the authoritarian power is not concentrated in the hands of few at the top. Blockchain technology is being touted as a tool for the next industrial revolution, as it has the potential to eradicate shortcoming of traditional centralized systems.
This article would help you understand Blockchain, Cryptocurrency and ICOs and the relation between the three.
You May Also Read: Should A Blockchain Be Decentralized?
The Blockchain Technology came into the center of attention when Satoshi Nakamoto introduced Bitcoin to the world in 2009. Blockchain Technology is based on the concept of Distributed ledger technology, where the authoritarian power of an organization or a sector is distributed among the peers, rather than concentrated in the hands of few.
The reason Blockchain is being lauded as a powerful tool for the next industrial revolution because, it promises to solve the biggest problem with current traditional ways, i.e middlemen.
Bitcoin was introduced as a cashless peer-to-peer network, with no centralized authorities like bank holding a monopoly over people’s money. Similarly, Blockchain promises to eradicate the issue of monopoly and middlemen.
Many traditional sectors like the agricultural, health care, entertainment and similarly many other sectors which loses tons of money and resources because of the monopoly of few can implement the Blockchain right way and get rid of the problems associated with that sector.
Many countries and big tech giants like IBM have realized the potential of the technology and have started pilot or test project to see its efficiency. Some of the real-world use cases of Blockchain in traditional sectors include,
- Blockchain In Energy Sector
- Blockchain In Real Estate
- Blockchain in Education
- Blockchain in Supply Chain
- Blockchain in Healthcare
- Blockchain In Gaming Industry
- Blockchain in Agriculture
You May Also Read: Blockchain Ethical Issues Explained
Cryptocurrency is one of the very first use cases of Blockchain in the financial sector, which was started by Bitcoin almost a decade ago. Satoshi’s vision was to create a financial system where people are in control of their money.
Since Bitcoin was an open-source project it motivated other developers and visionaries to use the source code and improve upon it to give us hundreds of more cryptocurrencies. After realizing the potential in technology, organizations like Ethereum network instead of solely focusing on the tokenization aspect started building a complete Blockchain ecosystem.
A complete Blockchain ecosystem like Ethereum network does not only have digital tokens but also help people in creating smart contracts for their businesses, after the success of smart contracts, the latest phenomenon is DApss or decentralized application.
Today there are thousand of cryptocurrencies trading on the market, and many new ones get added every other day. The reason for the success of the cryptocurrencies is its privacy factors, the ease of transaction and the negligible fee for the transaction.
You May Also Read: Blockchain Regulatory Issues Explained
Initial Coin Offering is the modern way of crowdfunding for tokenization of any new blockchain project. Why crowdfunding you ask, well any new blockchain or crypto project which does not have the monetary resources to sell their idea, use the ICO services.
The ICO help the project to propagate its idea to a larger audience, where they offer a certain portion of the total token on sale. The tokens offered during an ICO has no value of its own, since it’s just an idea, and the value depends upon the acceptance.
If more people see the potential and buy your token, it gives the creator the monetary resource to work on the project and make it more refined before getting listed on an exchange. So it is like crowdfunding, where people contribute to the project if they see the potential and hope when the final product is launched it’s worth the early investment.
You May Also Read: Can Blockchain Technology be Hacked?
What is the relation between Blockchain, Cryptocurrency, and ICOs
After reading about all three you must know that all three things Blockchain, cryptocurrency and ICOs are interrelated. The blockchain is the technology which powers the concept of cryptocurrencies, without Blockchain, there will be no cryptocurrency.
ICOs are interdependent on cryptocurrency, since if there won’t be any cryptos, then there won’t be any Initial Coin Offerings either. Thus, all three concepts of the blockchain, cryptocurrency, and ICO are inter-dependable.
Here Are Few Articles For You To Read Next: