Blockchain and cryptocurrencies has been a hot topic lately. So what are they really?
According to Investopedia.com…
“A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central record-keeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.”
“Originally developed as the accounting method for the virtual currency Bitcoin, blockchains – which use what’s known as distributed ledger technology (DLT) – are appearing in a variety of commercial applications today. Currently, the technology is primarily used to verify transactions, within digital currencies though it is possible to digitize, code and insert practically any document into the blockchain. Doing so creates an indelible record that cannot be changed; furthermore, the record’s authenticity can be verified by the entire community using the blockchain instead of a single centralized authority.”
If you were like me, it would still be difficult to understand what blockchain really is even with Investopedia’s definition. Fortunately, BBC came up with a simple to understand video about it…
Just a friendly reminder… remember the golden rule in investing — never invest in something you do not understand!
(Randell Tiongson, RFP is an advocate of Life & Personal Finance. With nearly 30 years of experience in the Financial Service Industry – Banking, Mutual Funds, Insurance and Financial Planning, and Management Consultancy – he has become one of today’s most respected personal finance coaches in the country. His writing appears here with the author’s permission. Check out his website for more financial advice www.randelltiongson.com)