Blockchain is the future of finance, and the future is right around the corner! With technology constantly advancing, it’s critical for your small business to keep up to date. Otherwise, you risk falling behind and getting lost in the past. To stay informed and learn more about Bitcoin and the blockchain, including its benefits, keep on reading!
What is Bitcoin and the Blockchain?
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tapscott, authors of Blockchain Revolution
So what is Bitcoin and the Blockchain that everyone’s talking about? A blockchain is a public ledger of all Bitcoin transactions that have ever been carried out. The completed blocks are constantly added to the growing blockchain in a chronological order. More specifically, the blockchain contains the full history of the transactions, where you can think of the blocks as being individual bank statements. Thus, the blockchain creates a permanent and unalterable database of all Bitcoin transactions. Also, since the blockchain is decentralized, you can carry out Bitcoin transactions directly, without any third-party intermediary. In sum, the blockchain’s mission is to create more a open, fair, and accessible financial future.
Benefits of Using Bitcoin
“As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on a main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.” – Ian Khan, TEDx Speaker
Wait, so we don’t have to wait for days for a transaction to clear the banks? That’s right! Bitcoin allows two users to make an exchange without the intermediation of a third party. As a result, Bitcoin transactions only take minutes to complete and are processed constantly. Hence, people around the world can now validate and transact immediately using Bitcoin. Moreover, by eliminating third party intermediaries, costly transaction fees will be minimized.
The blockchain consists of decentralized networks that are spread over millions of computers. Therefore, this eliminates the risk of a central point of failure or weakness. In effect, the blockchain is more resistant to malicious attacks since no centralized information exists for a hacker to exploit. The data is accessible to users all around the globe and is secured by encryption technology. Encryption technology is more secure because it uses randomly generated strings of numbers that can only be decrypted using a private key. This is much more effective in comparison to the common “Username” and “Password” security method.
Any changes made to public blockchains can be viewed by all parties, which creates transparency. The data is public because it is embedded within the blockchain network as a whole. Furthermore, all Bitcoin transactions are immutable. This means that they cannot be altered or deleted, which minimizes fraudulent activity. Consequently, the transactions are internally audited through blockchain technology. In other words, small business owner’s won’t have to worry about keeping track of these transactions (say goodbye to hording receipts!). On top of that, the stress and pressures of an audit are reduced, since all of the transaction information is permanently stored.
High Quality Data
Lastly, Bitcoin transactions provide high quality data that is complete, accurate, timely, and universally available. Since blockchain technology records every Bitcoin transaction ever executed, it can also provide historical insight.
Hopefully, after reading this you have gained some insight about Bitcoin and its benefits. In brief, the blockchain and Bitcoin provide endless opportunities to those around the world, such as secure cost- and time-saving benefits. At UpSide Accounting, we are now accepting the digital currency, Bitcoin! If you’re a small business that currently operates using digital currency, contact our team and we would love to see if UpSide is a good fit for you.