However, In March 2014, Bitfury was positioned to exceed 50% of the total computing power of the Blockchain network. Instead of continuing to increase its control over the network, the group chose to self-regulate itself and promised that they will never go above 40%. Bitfury knew that if they chose to continue increasing its control over the network, the value of the Bitcoin would fall as users would have sold their currencies in preparation for the possibility of a 51% attack. In other words, if users lose their faith in the Blockchain network, the information on that network runs the risk of becoming completely useless. Blockchain users can only increase their computing power up to a certain point before they start losing money.
Blockchain forms the basis for cryptocurrencies such as the Bitcoin. By spreading operations through a computer network, Blockchain allows Bitcoin and other cryptocurrencies to operate without the need for a central authority. This not only reduces risks but also eliminates many of the transaction and processing fees. It also gives countries with unstable currencies a more stable currency with more applications and a wider network of individuals and institutions who can do business, both nationally and internationally.
Using Intelligent Contracts
A smart contract is a computer code that can be built in the Blockchain to facilitate, verify, or negotiate a contract; They operate under a set of conditions that the users agree to. When these conditions are met, the terms of the agreement are carried out automatically.
Pros & Cons
Despite its complexity, the potential Blockchain as a decentralized record-keeping is almost unlimited. With greater privacy for the user and greater security to reduce processing fees and to make fewer mistakes, the Blockchain technology can be used for more applications beyond those described above.
- Improved accuracy by eliminating human intervention in the verification process.
- Cost reduction by eliminating third-party verification
- Decentralization makes it more difficult to manipulate
- Transactions are safe, efficient and private
- Transparent Technology
- High cost of the Technology associated with mining bitcoin
- Low Transactions per second
- History of use in illegal activities
- Susceptibility to be hacked
Transactions through a central authority can take up to a few days to get to an agreement. If you try to deposit a check on Friday night, for example, you may not see the funds reflected in your account until Monday morning. While financial institutions operate during office hours, five days a week, Blockchain works 24 hours a day, seven days a week. Transactions can be completed in about ten minutes and can be considered safe after a few hours. This is particularly useful for cross-border trades, which usually take much longer due to time zone issues of and the fact that all parties must confirm the payment processing.
Many Blockchain networks function as public databases, which means that anyone with an Internet connection can view a list of the transaction history of the network. Although users can access details about the transactions, they can’t access the information of the users who perform such transactions. It is a common misconception that Blockchain networks such as Bitcoin are anonymous, when in reality they are only confidential.