What is blockchain technology? | Money Smart

SAN ANTONIO — You’ve most definitely heard of cryptocurrencies like Bitcoin and non-fungible tokens (NFTs). These digital belongings function on what’s known as blockchain expertise.

Blockchain expertise is a digital system that enables customers to report, retailer and handle data. A easy approach to consider it’s like Google Docs. A number of customers can use this on-line device to collaborate, edit and insert data instantaneously.

Blockchain expertise is much like Google Docs besides that customers can not change data as soon as it’s within the system. Additionally, this technique is decentralized, and the saved data will be verified by a number of customers.

“Blockchain, if you concentrate on it, is absolutely only a database. It’s a ledger, however it has transactions on it,” defined Karl Eggerss, senior wealth advisor and accomplice of Covenant. “One of many best examples proper now could be cryptocurrencies. After they’re purchased and bought, it’s being recorded on this ledger.”

Like its title says, blockchain is data that’s chained collectively like blocks. As soon as new knowledge is entered into the system, it’s timestamped and related to the entire earlier transactions, knowledge or “blocks” earlier than it.

Blockchain lovers say this expertise will revolutionize companies. An actual-life strategy to apply this expertise is to streamline monetary transactions with banks or contracts.

“One factor that may be nice is that if we are able to make the closing course of, after we buy a house or refinance a house, a bit bit simpler. We ship all these paperwork to the lender and so they require all this stuff,” Eggerss mentioned. “Can blockchain be used for one thing like that?”

Whereas it stays to be seen how blockchain expertise may change lives on a big scale, the chances are far-reaching.

“These applied sciences could also be complicated to many people, I feel we have to embrace it and say what are the chances and know that this stuff can evolve over time. The concept is that issues can truly be extra environment friendly,” Eggerss mentioned.