Bitcoin
What is Bitcoin?
Bitcoin, the first and biggest player in cryptocurrency. Simply put, it provides a platform for financial transactions. In doing so, it removes the fees and inefficiencies associated with sending money via traditional third parties. Perhaps most importantly, Bitcoin removes the potential for corruption and risk inherent in centralizing information.
Each Bitcoin is made up of 100 million separate pieces. Each piece is identifiable and programmable—a smart currency.
Bitcoin in the real world
A good example would be a healthcare allowance in dollars that could only be used at certified places. In this scenario, you wouldn’t need to verify that someone actually follows the rules in the bureaucratic process afterwards because the funds wouldn’t work unless it was for a qualified sale.
Another example is that businesses can program their budgets for salaries, equipment, maintenance, etc., so the associated funds cannot be embezzled or spent on anything else. You can program the rules into the money and ensure compliance from the get-go.
Enter Ethereum
Ethereum is another popular cryptocurrency for investors like Bitcoin, but its purpose and capability vary substantially. Instead of facilitating a peer-to-peer electronic cash system, the Ethereum blockchain focuses are running programming code of any decentralized applications or Dapps. While all blockchains have the ability to process code, most are limited.
Ethereum is different.
It allows developers to create whatever operations they want in smart contracts. Also, any current services that are centralized can be decentralized using Ethereum. This includes:
- Bank loans
- Voting systems
- Title registries
Ethereum likely has the biggest role to play in cryptocurrencies shaping the future, and there is some speculation that the next version of the internet will be brought to us by Ethereum.
Decentralizing the blockchain with SiaCoin
SiaCoin uses the blockchain as a decentralized storage platform. Today, in cloud storage, a single company controls your data. Recently, the trend has been for companies to abuse privacy rights of users in pursuit of higher profits. Users all over the world contribute disk storage from their computers to form a decentralized network. SiaCoins are used to rent storage from this network, and hosts are paid in coins for their hard drive space contributions.
A combination of smart contracts, erasure coding, and encryption ensure secure, private, and reliable decentralized storage. The costs of hosting your data are a fraction of what AWS charges and the speeds are faster. When big data meets blockchain, expect to hear more about this kind of technology.
Are there other cyptocurrencies that you want to learn about? Let me know in the comments below!
