What is the Blockchain and Cryptocurrency?

A Blockchain is essentially a database that stores information for the various Cryptocurrencies. The Blockchain database information is stored by powerful computers. The information for these different cryptocurrencies is stored in blocks. The reason it is called the Blockchain is because each chain of data forms a chain like a block. Like a currency such as the NZD or USD, what gives each Cryptocurrency its value is both scarcity, and how much someone else is willing to pay for it. Prices in everything are decided upon by supply and demand, and this is the same with Blockchain and Cryptocurrency. Bitcoin has easily been the most hyped of the Cryptocurrencies, so the demand for it has been higher than for Litecoin etc.

Looking at Bitcoin, like Litecoin and Dogecoin, it uses a collection of computers to store its blockchain. It is like if a company owned a server of 1,000 computers holding all of their clients' information. Except in Bitcoins case, these computers are in many different geographic locations and are operated on by separate individuals and groups. The servers that make up Bitcoin's network are called nodes. Each node has a complete record of all the history of all of Bitcoins transactions. The decentralized nature of Cryptocurrencies is one of the advantages that people like to point out about it. As of the end of 2020, Bitcoin had around 700,000 blocks of data. As the size of the database grows, the ability for hackers to penetrate it decreases. Every block of data is automatically cross-referenced against all of the others, so if there is an irregularity in some data, the system will pick it up.

Bitcoin was launched in 2009. In the beginning it was frequently used for black market purposes, as it was untraceable and universal. When it was small, the ability for hackers to penetrate the system was possible. Now though, the system is very large and more sophisticated. Hackers would not be able to penetrate it. Today a number of reputable companies incorporate the Blockchain in their business, including Seimens, Tesla and Unilever. IBM has created a Food Trust Blockchain to track the journey that food products take to get to their location. To put it simply; Bitcoin, Litecoin and the other cyptocurrencies use the Blockchain as a way to store their data.

There are 6,700 different crypocurrencies. They are digital currencies that can be used to buy goods and services. There are a few different platforms that can be used to buy and sell them, such as Paypal.

At the moment a lot of the movements in the prices are being driven by speculators. But over time, as more companies use them as a form of payment, they will become more mainstream.