Blockchain is what makes cryptocurrency and NFTs go around. Find out more about how blockchain works and how it could power the next big thing, the metaverse.
Blockchain is the revolutionary technology best known for its role in cryptocurrency. But lately, things have been heating up in the blockchain world, with new trends and advancements like NFTs and the metaverse.
What’s the big deal about blockchain? And will the metaverse ever really take off? Let’s find out.
What is blockchain?
Blockchain is a digital ledger that stores information about transactions and ownership.
Information is stored as ‘blocks’, which are linked together via ‘chains’. With every new block, the chain will connect the new block to the previous block. By virtue of this mechanism, information can only be added, not changed or removed. As such, it is a very transparent system.
Blockchain is also often described to be decentralised because the information can be shared across a network of computers without being controlled by a single entity. Information is encoded using cryptography, which keeps it secure.
Being both decentralised and secure has made blockchain a transformational technology for uses where highly-important transactions need to be made. It is currently widely used in crypto exchanges in Singapore and worldwide, as well as used by banks, NFT trading, and even in real estate and healthcare.
Uses of blockchain
- In cryptocurrency
Blockchain is used to carry out and store information about cryptocurrency transactions, be it for Bitcoin, Ether, or Litecoin exchange in Singapore. Crucially, like any system where money is involved, security is always of huge concern. Blockchain addresses this issue with its secure encryption method and transparent nature, reducing the opportunity for hacking and fraud. However, one may argue that there is just one limitation of blockchain for currency trading: the need for speed.
Due to the complexities of the algorithms used to encode and decode information during a crypto exchange, transactions in crypto often suffer in terms of speed as compared to centralised methods of exchange. That’s one area developers are still working on to continually innovate and produce better transaction times using blockchain.
- In NFTs
NFTs, or non-fungible tokens, are a new way of buying and collecting art. Strange as it may sound, an NFT could be anything – from a digital artwork to a tweet. The idea behind it is to record ownership for these NFTs using blockchain technology, so the ‘owner’ of an artwork can be digitally verified from anywhere.
Today, NFTs can be bought using cryptocurrency, and it is a way for digital creators to monetise their craft in this crypto era.
- In the metaverse
From currencies to art, blockchain technology is quickly moving towards building a virtual world where digital goods can be exchanged and used – called the metaverse. Currently, some big corporations are firm believers that the metaverse will be the next big thing. It would be a digital reality for all sorts of activities, including socialisation and co-working.
However, those who try to explain exactly what the metaverse is had so far fallen short. No one at present knows what the future holds for the metaverse, and it is up to developers and consumers to decide how they will shape it.
First conceived as a way to address the limitations of the technological norms of record-keeping, blockchain technology has indeed seen unprecedented growth. It is now hard to imagine a world without blockchain, but at the same time, so much more awaits to be unlocked.
What is key, then, is to look out for the latest advancements in blockchain technology. Surely, there will be more exciting things ahead.
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