Blockchain is one of the most significant assets that truly disrupt our day-to-day lives. It’s not just cryptocurrencies. “But Dennis Loos, isn’t blockchain just cryptos?” Oh, no, it’s much, much, MUCH more than that.

1. Blockchain Technology - By Dennis Loos
Blockchain Technology
Blockchain is one of the most significant assets that truly disrupt
our day-to-day lives. It’s not just cryptocurrencies. “But Dennis
Loos, isn’t blockchain just cryptos?” Oh, no, it’s much, much,
MUCH more than that. When talking about the world of
cryptocurrencies, it is impossible to ignore the elephant in the room
— and ultimately what grants them power — theimpact blockchain
technology has had in this century. The term blockchain is often
associated with and compared to Bitcoin since their objectives are
the same - and to a degree, one is a castoff of the other — the
Blockchain helps to create that currency, as well as others. Any
federal or traditional entity does not control money. This article will
look at blockchain and introduce you to the dynamic, complex, and
somewhat controversial tech.
What Is a Blockchain?
Like the name says, a blockchain is a, well, chain of blocks. This
chain of blocks consists of a database system stored in a digital
format that is distributed and shared between the nodes of a
computer network. Its function is to record the information in a
decentralized form. In layman’s terms, it is a digital ledger spread
across infinite servers and computers. The system also guarantees
the timeliness and security of data records, providing a governing
protocol without a third party overseeing or enforcing them. It is an
entirely autonomous system that can’t be altered. And it doesn’t
require, like banks or other traditional financial methods, other
people to ensure it works appropriately and oversees it.
The blockchain system is known to be associated with the cryptocurrency
world.

2. When comparing the blockchain with a traditional database, the
main differences begin with how the data is distributed. The
blockchain collects all the data by placing it in groups of blocks. The
blocks contain specific storage capacities, and when they are filled,
they are automatically closed and linked to the previously
completed block, forming the blockchain.
How Does a Blockchain Work?
The blockchain is a digitized and decentralized public ledger of all
cryptocurrency transactions. It constantly grows as “completed
blocks” are recorded and added in chronological order.
The word "block" refers to data made up of several "blocks," each
representing an individual transaction processed by the network. A
new block can only be added at the end of the blockchain, in which
each one contains a hash pointer with a link to its predecessor. The
blockchain was initially designed for Bitcoin but has become
popular with other cryptocurrencies.
This system was first proposed in 1991. Since its application with
the Bitcoin cryptocurrency in 2009, it has become very famous.
Later on, it was implemented by numerous cryptocurrencies,
decentralized finance applications, non-fungible tokens, and smart
contracts.
Advantages and Disadvantages of blockchain
Advantages:
- The main advantage of this technology is decentralization.
Blockchain technology does not need other parties to act as
intermediaries to carry out the transactions. This issue helps to
reduce the time to verify and validate transactions.
- Thanks to how the network is distributed, nobody owns the
network. This means that users will always have multiple copies of
the same information. This advantage also makes it resistant to any

3. tech problem that might occur. For example, if a node fails, it does
not affect or cause generalized problems in the specific network.
- By having a distributed network, errors are avoided. Since the
information goes through several verification processes, it is almost
impossible to insert malware or malicious intentions or actions
during the transactions.
- The system also reduces the costs of transactions. Due to the
nature of the blockchain, it allows the verification of transactions
rapidly and effectively.
Disadvantages:
- This system has a low cost for users, but high implementation
costs for companies, thus delaying its execution and widespread use
in filed such as finance, banking, health, etc.
- Having several users verify the duplicate transactions becomes
inefficient because only one will receive the reward after mining.
Also, when many users perform the same task, it becomes less
energy efficient.
- Due to the continuous growth of users, the number of operations
integrated and stored into the blocks also grows. Therefore, the
time that users need to dedicate to mining must be constant,
causing an ongoing problem with non-stoppable hours of work and
fatigue—no downtime for users.
- The lack of intermediaries in the transactions will revolutionize
most companies — sectors responsible for validating payments and
processes will disappear over time. This issue, unfortunately,
creates unemployment because job positions needed for these
processes will end gradually.
- Today, the energy expenditure is vast - electricity. This cause
many of its proponents to still be wary of blockchain tech since - in
its current form - it isn’t the least bit eco-friendly.

4. The blockchain system has many pros and cons that need to be
considered when managing transactions by users and miners. Some
disadvantages can create huge issues in the mining process. The fact
that the information in the blocks is impossible to change - or edit -
once cemented in place makes serious problems when correcting
and fixing errors. This system creates anonymity that most people
appreciate, but it also makes many illicit transactions possible.
Thus, hackers exploit this type of an operation because they are
impossible to trace. And not only hackers but other criminal
enterprises.
How did this technology come about?
In 1991 the first project of the blockchain system using
cryptography appeared. In 2008 it was published by a person under
the pseudonym of Satoshi Nakamoto. This technology came into
operation with the launch of the Bitcoin currency. From this point
on, different cryptocurrencies started to appear and implement
their systems to reach their specific objectives. And it is my
estimation, that Dennis Loos’s estimation, that the tech is just
getting started — it still has a lot of ground and advances to cover.
Blockchain in Banking
Banking is one of the industries that benefit the most from this
technology. Since financial institutions only operate during certain
hours, blockchain becomes handy when verifying transactions. For
example, if a check is deposited and many transactions are waiting
for verification, it can take anywhere from a couple of hours to
several days for the check to clear. But with blockchain technology,
verification processes can be done relatively quickly. This
technology works 24/7; it never rests. By introducing this system,
banks can confirm transactions in less time. Also, banks can make
transactions between blockchains transparently more secure. If
banks begin to implement this technology, their security also
increases. All types of transactions are handled in an agile, dynamic,

5. and safe manner. Blockchain tech can even be implemented in
loans, billing, and supply chain financing.
Since most banks use an isolated system, which results in a manual
process, introducing this system eliminates those processes and
automates them, improving the connection between different
infrastructures — entities, and procedures.
Also, as I’ve covered in other Dennis Loos originals, blockchain will
radically alter - for the better - actuaries and the healthcare
profession.
In my next article, a Dennis Loos original, we’ll look at smart
contracts and how they link up with blockchain tech.