Blockchain is perhaps best known as the technology underpinning cryptocurrencies, the first of which was Bitcoin, invented in 2009 by its anonymous inventor, who adopted the alias Satoshi Nakomoto.
Before cryptocurrencies there were two kinds of money. Commodity-based, typically exchangeable for a fixed amount of some commodity, most commonly precious metals like gold or silver–and fiat money (pronounced FYE at—not like the Italian car maker), “a term to describe currency that is used because of a government’s order, or fiat, that the currency must be accepted as a means of payment”.
Commodity currencies have volatility issues. Fiat currencies throughout history have been abused by governments. The IMF estimates that the Venezuelan hyperinflation will reach 1,000,000 percent by the end of 2018.
Bitcoin and other blockchain-based currencies represent a new kind of money. The “blockchain” is actually a shared distributed ledger that facilitates the process of recording transactions, keeping everyone honest, and tracking assets in a business network–while allowing all stakeholders to remain anonymous. But blockchains can track virtually anything of value, not just new currencies, reducing risk and cutting costs for all involved.
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