It’s a fact that cryptocurrency is gradually becoming popular in organizations and markets worldwide, strengthening the premise of global economic freedom through complete decentralization. Blockchain technology efficiently powers cryptocurrency and is the foundation of this new age payment mechanism. Cryptocurrency built on blockchain technology is resistant to hyperinflation. Blockchain technology allows individuals and businesses to profitably realize the benefits of cryptocurrency without experiencing any kind of volatility and third-party involvement. Blockchain based cryptocurrencies are playing a significant role in rapidly growing decentralized finance ecosystem. For us to to fully understand the role and advantages of blockchain in cryptocurrency, it’s important to first know how the they are connected and how companies providing blockchain development services are front-ending this cyber revolution.
The Connection Between Cryptocurrency and Blockchain
A blockchain is basically a ledger or database of agreements or transactions or that are undertaken across a network of computers. Cryptocurrency transactions involve the representation of smart digital contracts that enforce contract details, such as crypto type, receiver, sender and the amount. As more and more groups of transactions are affected, they are simultaneously processed in a series of blocks and accordingly recorded in the ledger for public viewing worldwide. This is effectively powered by a technologically sound blockchain development company.
What’s more, the software code powering the blockchain is open-source and free which implies that that developers can incorporate that code to create decentralized applications on the blockchain. This comes across as a huge benefit for businesses, as they can easily build create new apps that offer specific business solutions, on the existing code. It’s actually the benefits of blockchain technology without mentioning cryptocurrencies, provided by blockchain development organizations.
It would not be wrong to say that cryptocurrencies are the digital fuel that nourish ecosystems based on blockchain technology. They successfully address different concerns across diverse markets markets and perform specific functions. The unique capabilities of blockchain technology are highlighted in the many benefits that cryptocurrencies offer to both individuals and businesses.
The decentralized framework of crypto-currency adequately levels the playing field by eliminating all intermediaries and enabling peer-to-peer secured autonomous transactions between individuals companies providing blockchain development services successfully addresses counter-party risk by ensuring that the solvency of the cryptocurrency does not rely on any of the parties involved in the transaction.
Blockchain technology enables cryptocurrency to offer the following benefits:
Low Transaction Fees
AS cryptocurrency transfers are peer-to-peer and do not involve any centralized intermediaries, the transaction costs of the transfer are minimal. For example, an international fund transfer by a centralized bank would certainly include fees related for the conversion of funds. In a de-centralized system absolutely no charge is levied on the currency conversion.
Along with an increase in costs, involvement of centralized authorities and third parties significantly increases the transaction time dues to the lengthy procedure which has to be followed. The blockchain technology of the blockchain development company powering crypto-currency successfully resolves this shortcoming by enabling almost instant peer-to-peer transactions.
Individuals and businesses often have to deal with complete strangers when buying and selling merchandise across geographic boundaries. That has the potential to open the door to cyber fraud. The robust blockchain technology behind cryptocurrency successfully helps to eliminate the risk of this fraud, as transactions executed on a blockchain are fully transparent and completely irreversible.
While we surely do live in a connected world, transacting financially across political and geographic borders can be extremely complicated when done using traditional financial systems. Blockchain technology backed crypto-currency invoked the power of decentralization to standardise financial infrastructure for similar access across dissimilar boundaries. Blockchain technology allows anyone to access cryptocurrency from anywhere without encountering any interference from a central authority. For example, a small business owner in India can use cryptocurrency as a viable and secure alternate way to fund his business. India is witnessing the emergence of blockchain development organizations who are helping businesses and government offer secured transactions to their customers and citizens respectively.