What is Blockchain Technology?
Blockchain is the digital and decentralized ledger that records all transactions. Anytime someone buys digital currency on a decentralized exchange, sells coins, transfers, or buys goods and services with virtual currency, a ledger records that transaction, often in an encrypted way to protect against cybercriminals. All these transactions are recorded and processed without a third-party provider or bank, which is usually the case.
Why was Blockchain Invented?
Banks almost always serve as an intermediary of currency transactions, thus taking their cut in the process. Blockchain developers want the ability to process payments without a need for this middleman. For example, when transferring money to overseas markets, a payment or transaction could be delayed for days waiting for a bank to verify it. People argue financial institutions shouldn’t tie up cross-border payments for such a long time.
Are Blockchain Transactions Anonymous?
Despite popular belief, most blockchain transactions aren't anywhere near as private or anonymous as you'd like to think. Even though you don't have to provide a Social Security number or bank account when buying or selling cryptocurrencies, an analysis of a blockchain can often be traced back to an individual sender or receiving of funds. There are however certain “privacy” coins to counteract this.