Does the very idea of online financial frauds send chills down your spine? How about owning the data that belongs to you and storing them in a secure, reliable, and distributed database? The blockchain technology, which everybody hopes will contribute to the making of a more open, accessible, and fair financial future, can make that happen. Decentralization is the name of the game here, while the ultimate goal is to end the problem of manipulation. It’s predicted that the technology has all the right potentials to revolutionize broad categories of industries, including banking, insurance, healthcare, trading, government, and even voting systems. Now, all these sound exciting, do not they? Let’s find out what this innovation is all about and whether or not you should consider adopting it for your business.
What Is Blockchain Technology?
Don & Alex Tapscott, authors Blockchain Revolution (2016) described the technology as an incorruptible, real-time digital ledger that is programmed to record economic and all other types of transactions including contracts, logistics info and so on.
The chain comprises batches of transactions, and every entry represents an encrypted block. To edit a block, you’ll need to ‘own’ it and hold a private ‘key’ to gain access to it. Each block is connected to the preceding one through an embedded cryptographic hash and a timestamp that keeps track of all transaction data. Everyone in the distributed blockchain will get to see the updates as and when they occur. It is much like a Google doc, where a sheet is constantly updated, and each participant can access the modified versions in real time.
It is noteworthy that the system allows for the distribution of the digital information contained in each block, but does not allow them to be copied. The effect? You cannot alter any information contained in any of the blocks retroactively, and if you attempt such a function, the entire network is likely to collude.
Anyone with access to a blockchain can track all changes across the chain. When it comes to validating a transaction, the system records the operation on the main register as well as some secondary registers that form a distributed chain system. All entries are connected to one another through a secure verification mechanism.
The blockchain system sets up a peer-to-peer network within a broad structure, keeping intermediaries out of the equation. The technology saves entities from using different ledgers, and as a result, simplifies the transactions significantly.
By minimizing the roles of corporate intermediaries in the commerce, it facilitates a smooth exchange of goods and services with people all over the world. By enabling individuals across the globe to transact securely without having expensive intermediaries involved, the system may one day make governments, banks, and corporate conglomerates, significantly less powerful.
The idea of creating hack-proof databases has always attracted stakeholders across the industries. The system’s ability to allow for the distribution of digital information without making copies made it a sure winner in the financial sector and beyond. And thus, the system that was initially created for the digital currency, Bitcoin, now finds newer application in many other fields as well.
For example, people can use blockchain system to conduct a host of digital activities ranging from opening a bank account to applying for jobs, and from posting on social media to logging on apps and more by using a tag contained in a blockchain. In the future, governments might utilize the system to operate the voting system. Different social media platforms, too, are expected to rely more on blockchain in the future to facilitate more selective sharing and viewing experiences. In the legal sphere, this open source project is believed to open up new avenues in automating legal procedures like assigning your assets to your heirs.
No wonder, the technology has grown by more than 100 percent per year since it began in 2010 and tech-giants such as IBM and Microsoft are investing billions of dollars in this technology while, 90 percent of major North American and European banks are integrating blockchain in their solutions. Against this backdrop, it’s hardly surprising that blockchain will be a $20 billion industry by 2024.
Although full integration of blockchain into our infrastructure is decades away, the change has already set in. Therefore it’s high time to learn what opportunities it might create for your organization. Meanwhile, to understand what other technologies your organization may need to address your business problems and how to get the most value out of them, contact us here.