Almost all cryptocurrencies are designed with blockchain technology, pi cryptocurrency is not an exception to this. Here we will be explaining what blockchain technology is, why it has been used for most crypto projects including pi network, and the possible merits and demerits of this technology.
Blockchain Technology pi cryptocurrency
What is blockchain technology?
According to PWC United States, A blockchain is a decentralized ledger of all transactions across a peer-to-peer network. With this technology, a participant can confirm transaction from any region of the world, without any necessary central authority. We said any region of the world because cryptocurrency transaction is not limited to any geographical location. Applications of these technology includes, fund transfer, trading, voting systems and others
Why is blockchain technology used for pi cryptocurrency
According to Investopedia, Blockchain forms the bedrock for cryptocurrencies like Bitcoin, Ethereum and Pi. Paper currencies such as the British Pounds are regulated and verified by a central authority, usually a bank or government. Under this central authority system, user information and currency is at the control of the government or bank. This implies that if there is instability in government or the sudden demise of bank, the value of the currency is greatly at risk. These worries gave rise to a new generation revolutionary currency called crypto.
Using blockchain technology, it was possible to develop a new currency that operates across computer without a central authority. This development not only reduced risks, but also eliminate transaction fees associated with the old system of currency. It also eliminates the effect of unstable government on the currency of the nation as crypto has no central body and can be used for transactions across the globe. In other words, cryptocurrency makes it possible for individuals from any part of the globe to do transaction with a single acceptable currency irrespective of the government of one’s country.
Advantages of blockchain Technology
Below are reasons why blockchain is used for the technology behind cryptocurrencies including pi cryptocurrency
Accuracy of the Chain
Transactions on the blockchain network are approved by a network of thousands or millions of computers, which eliminate all human involvement in verification process. This reduce or eliminate errors due to human. Computers errors are minimal, and even though there exist computational errors, it will only occur in one copy of the blockchain. For an to affect the rest of the blockchain, over 51% of the computers must have made the same mistake and this is neat impossible.
Blockchain information’s is not been stored on a central location or device. Rather the information’s is copied and distributed across networks of computers.
If a new block got introduced into the blockchain, every computer on the network get updated to reflect the new change.
Distribution of information’s across networks makes it difficult for blockchain information to be tampered with, unlike if it was stored in a single database. Hacking is difficult due the nature of the system.
Due to the fact that pi cryptocurrency together with other cryptocurrency has no central authority to verify transactions, it eliminates transaction fees incurred during transaction using the traditional bank method. This reduction in cost makes pi cryptocurrency technology together with other cryptocurrencies a better option and alternative to the traditional paper currency we all know.
Most transactions placed through a central authority takes some time to validate as a result of work schedule of financial institutions such as banks, etc. this problem is eliminated in blockchain transactions, as transactions goes 24hours a day, 7 days a week. With each transaction getting secured hours after it took place. This is considered useful for cross border trades that takes longer time to get validated.
Some other benefits of blockchain transactions includes; privacy, transpiracy, security and others. To know more kindly read up benefits of blockchain and pi network
Demerits of Blockchain Technology as regards to Pi network
To everything that has advantage, there is always a disadvantage. Though the advantages may seem so over whelming that we tend to ignore the demerits, but that does not imply that that there are no disadvantages associated. Below are some of these challenges
Cost of operations
Although blockchain do save users transaction fees, the technology may not totally be free as many may perceive it. Operating most computers of the network of computers is not surely free. Though this cost is at minimal compared with the traditional alternatives.
It may amaze you to know that the power consumption of millions of computers on the bitcoin network is equivalent to Denmark Annual electricity consumption. This hug amount of energy consumption by these computers could be really expensive depending on the cost of energy per kilowatt hour.
Cost of procurement of mining device
Most cryptocurrency mining device are expensive, but this may not be an issue on the side of Pi Cryptocurrency as it could be mined by smart phones and laptops from the comfort of your room.
Maintenance is an integral part of every technology. Just we stated earlier, blockchain are run on network of millions of computers and these computers all need servicing once in a while.
Adding a new block to blockchain usually take a little time there by limiting the transactions per seconds. This transaction per seconds vary in each type of cryptocurrency, example bitcoin has a TPS of 7 unlike Ethereum that can handle higher.
Blockchain transactions are usually the best for illegal transactions which account for why cryptocurrencies are often use for illegal transactions. Though this has raised concern over the years and has force governments such as that of the united states to implement measures to curtail the anonymousness of crypto transactions.
New cryptocurrencies are more susceptible to being hacked, though this may be difficult due to the computational power required to gain majority control of the blockchain. But from researches done so far, this hacking is nicely to increase as hackers now rent computational power instead of buying most of the equipment’s.
Future of Pi Cryptocurrency
Today Pi is worth approximately $0.00, which is exactly the price of bitcoin in 2009. Pi currently has no value in real life compared to other currencies. But the public interest on Pi is really impressive which means it could be one of the sought-after cryptocurrencies in the future.
Having reviewed Blockchain, Pi Network and reasons why cryptocurrencies operates with blockchain, its necessary to make some conclusions on our research we have done over the year. Firstly, Pi network or cryptocurrency has a lot of potential yet untapped and secondly, its cheap to mine and economically as it does not consume much energy from your device battery during the mining.
Joining the Pi Network will absolutely cost you nothing to give it a try. Click to know how to start mining pi.