After the 2008 financial crisis, many questions were raised about the current financial system. Most of the problems of the financial crisis, at the core, revolved around trust, transparency, and policy. It was, and still is, quite easy for companies and corporations to work around the current rules in place and use poor policy to their advantage. Not only that, but it has become quite attractive for hackers to tap into funds and institutions and steal money as well. With the current run up in cryptocurrencies, there is a new way to do finance and do it different.
With cryptocurrencies using new blockchain technology, both individuals and corporations can be sure that their transactions will not be hacked or compromised by any outside intruders. The network, being totally encrypted, ensures that it is nearly impossible for any hacker to gain access to the private key associated with the public address of a user. This is an amazing advantage in a world where cyber security is the number one concern among much of the developed world.
One major advantage that the cryptocurrencies have is both anonymity and transparency. The developers of Bitcoin managed to include both, which does seem quite incredible. Nobody needs any personal information to generate a new address on the blockchain. Anyone can peer into an address at any time and can view all the transactions associated with the address, but the IP and location of the transaction cannot be traced. To add security, anyone can generate a new address for free and you can have as many addresses as you would like.
The Ethereum network has taken crypto currencies and blockchain technology a step further to incorporate smart contracts. Smart contracts can be used between 2 or more parties and ensure trust between users. As contracts become initiated automatically, it drastically reduces the need and use of outside third parties such as courts, lawyers, and legal systems to ensure that both parties fulfill their own part of the agreement. Many new applications are in development such as advertisement networks, financial funding platforms, and messaging platforms. New ventures are beginning to form to reach out to people in undeveloped countries and bring the technology to nearly 2 billion people who have never had a bank account. The technology isn’t going anywhere, and it looks as if the blockchain is here to stay.