Third parties/intermediaries to Bitcoin, Crypto guide, Cryptocurrency tips, Digital currency transactions
Third Parties/Intermediaries to Bitcoin
22 Jun 2021
With bitcoin, the financial network involved does not implement the use of intermediaries since its operations are handled primary by the user who holds the keys. This means that the user does not need to trust or implement the services of a third party in the name of executing the needed services, be it buying, selling or transferring the cryptocurrencies.
This also implies that incase of losses of keys, the user does not have a third party to whom this loss will be made liable. And therefore, no insurances to claim such a petition upon. The user thus remains the sole individual upon which such a liability is placed.
Third Parties/Intermediaries to Bitcoin Guide
For as long as the user is performing transactions using bitcoins and under the accepted platform external validations are not necessary. This however changes when there is interaction with the external world. Intermediaries are necessary to verify your identity and also to put the data in. This means that when a blockchain network needs to work together with other data bases, a go-between is needed.
The blockchain allows for fast, easy and efficient data exchange and interaction without necessarily having both parties trust each other. Therefore, synchronization of data real time across many networks is possible at a time without compromise on the data quality. Also processes that include inspections and outright data transfers will occur automatically and efficiently. Blockchain ecosystems that are not depended on issuance of permissions like bitcoin absolutely exclude intermediaries.
In a practical example, when a client buys using bitcoins, the seller’s digital appliance makes a consultation to the blockchain data center ledgers stored in thousands of other devices to verify if the buyer owns the needed amount. If this is agreeable from all the devices, a new data entry is actualized and added onto the chain effecting this transfer.
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According to Harvard Business Review, the blockchain strategy and investment has evolved over the years since when most companies involved in distributed computer networking technology seen in the adoption of TCP/IP which laid the groundwork for the development of the internet. The Harvard Business Review further states that TCP/IP introduced in 1972 first gained traction in a single use case: as the basis for email among the researchers on ARPAnet, the US Department of Defense precursor to the commercial internet, before which telecommunications architecture was based on ‘circuit switching’
This entailed a predetermined connection between the two par ties and then had to be maintained throughout the interchange. To ensure that this happened, telecommunications network providers had invested billions of dollars. The narrative thus changes with the upsurge of blockchain technology.
Smart networking with fast speeds and efficiency alongside privacy is the new wake in the telecommunications and asset control sector. Digitization and decentralization of these mechanisms has created a new ease. And middlemen effectively diminished on their previous functions.
Similarly, we have witnessed broader examples of the effects of digitization not only limited to the world of bitcoins. For instance, Amazon managed to sell more books than any other bookshop while companies like Priceline and Expedia made it possible, faster and easier to procure airline tickets and while at it, made it a very transparent process. Tours and travel intermediaries have also since been kicked out of the industry given that clients can now directly book their destinations of travel and stay and use Google maps to navigate through the host regions.
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