04Sep 2018

What is Blockchain Technology? Why is It Believed to Change the World

Nowadays everyone must have heard about the term Bitcoin, and a few of them must have some bitcoins with them and have pursued some transactions with them. It has gained popularity since it works without a central repository or administrator which is not the case in traditional currency. Now a major question arises, how are the transactions verified in such a case. It is where the blockchain comes into play. Now a question may come to your mind what is  blockchain technology.

The blockchain is a list of records also known as blocks that grow continuously. It is a digitized, decentralized, public ledger of all cryptocurrency transactions. It makes use of a distributed ledger technology (DLT). These are linked to each other and are also secured with the help of cryptography. In it, the most recent transactions are recorded and added to the blocks in chronological order and also allows its participants to keep track of their digital currency transactions without the need for central record keeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.

There is a great debate going on nowadays as to whether the blockchain is a fad or is really going to change the world. Before diving into the question, it is necessary to understand the fact that Bitcoin and blockchain are two different concepts. Although originally it was developed mainly as the accounting method for Bitcoin it can be used to accompany some other industries as well. Apart from that, it is also necessary to know about the problems in the traditional ledger methodology and the blockchain ledger methodology. Apart from that, it is also necessary that you have a proper idea of the same. Along with the same, a look at the current scenario can also help you deduce about the benefits of the blockchain.

Benefits of Blockchain

Here are some of the benefits that the blockchain offers over the traditional ledger methodology. These are:

Transparency

Transparency

In the current scenario, the transparency plays a major role in enhancing the business. More the transparency, better the business will perform. Blockchain facilitates you in achieving this as the control of the information of the users rests with them and also provides them complete control of their transactions. As any changes are accessible to all the users, it helps you to create a transparent system. It can help you to gain the trust of the customers and develop a healthy relationship with your users. Its transparency can be guessed from the fact that any user with access to a chain can view the entire chain and the transactions that are taking place in the chain.

Security

One of the best benefits of blockchain is the security that it provides amazing security and helps you to provide assured information. With the help of complex cryptography, the authenticity of the information is assured and helps you to tap into the vast potential of IoT by linking assets to actions. Transactions and data that make use of this technology do not allow any changes to data once written. To undergo such a change, it requires that the all or a vast majority of participating computers agree to this change. This makes it impossible for any backdoor transactions. Hence it turns out to be quite secure for the transactions and to carry out tasks that require optimum security. As this technology is distributed across multiple data centers, it can ensure security against any network and hardware equipment.

Faster transactions

Faster-transactions

Traditionally, the time taken to execute transactions is longer and may take days to process. In this case, the time taken is relatively lower and take mere minutes to process.

Less transaction costs involved

The elimination of third parties in the blockchain method reduces the transaction costs involved. This proves out to be beneficial for the users.

Industries in which blockchain is used

The blockchain is being used in a number of industries due to its secure and easier data exchange mechanism between different entities. It’s use facilitates the working in such industries and helps provide faster, better and reliable service to the users. Here are some of the industries in which this technology is used:

Cryptocurrency

Blockchain gained wide recognition and is able to achieve its current status due to the cryptocurrency bitcoin. Apart from these, several other cryptocurrencies crept up following the same mechanism and are used by a large number of people across the world. Eleven banks of the R3 consortium are connected to the centralized Ethereum-based blockchain network. Cryptocurrency market is now worth $500 billion, that is more than Warren Buffett’s Berkshire Hathaway.

Healthcare

In healthcare maintaining the privacy of the patients is quite necessary. Along with the same, it also requires that the processing is done faster in the case of any health-related issues. A community of hospitals, patients, doctors, insurance companies and other related entities to process the information faster and provide timely service to the clients. This can also be used to reduce the healthcare payment frauds.

Government

A number of government departments cause the delays in the information. This impact the services provided to the citizens and results in the longer execution times of the project. Having a shared data between the department helps a great deal and also introduces transparency and helps in faster execution. This can also help the prevention of corruption. E.g., Estonian government makes use of this technology to authenticate the data in their databases since 2013.

Law

Huge amounts of data are accessed through blockchains and transmitted. To facilitate the legal procedure and payment, it can be used with the help of smart contracts. This removes the requirement of a middleman and can help you to receive payments after the milestones are met.

Banking and share markets

Blockchains are also finding its usage in the banking and share market. To save the banking and transaction cost, bitcoins may turn out to be quite helpful. Apart from providing the faster and better services, it can also help to reduce the maintenance costs of the banks and share market. It can also be used in trade finance to detect fraud as a number of merchants go to multiple banks with the same invoice and get the bill discounted. It can also help you to tackle any bad loans by getting through loan history.

Automobile industry

The automobile industry is also expected to be impacted by the help of blockchain technology. With the advent of self-driving cars, this can play a major role in the payment methodology, booking rides, and several such tasks.

Defense

In defense, any unauthorized access, modification of critical defense infrastructure, operating systems and network firmware is necessary as it can compromise on the national security. For any country, any defense infrastructure and computer systems are situated in different locations. With the help of this technology and distributed data centers can ensure your security against attacks on important network and hardware equipment. This can be achieved by the help of private blockchain. This ensures security for the company.

Some major Blockchain investors

After going through with the benefits and uses of the blockchain now comes the important task of knowing about some of the major investments in the same.

  • Various industries are planning to make significant investments by tech giants as well as Microsoft. Bitcoin has more than 8 million accounts and is growing considerably day by day $8-10 billion.
  • More than $1billion has been invested in blockchain based companies. By the year 2024, this is expected to rise to $8-$12 billion dollars on an annual basis.
  • SBI Holdings has eight stakes in eight blockchain firms. It aims to develop new applications for the same to facilitate the trading of cryptocurrency.
  • Google has also been a major investor in Ripple a money transfer company, i.e., the bitcoin wallet company.
  • Various other organizations like Overstock.com, Citi, and Goldman Sachs are also major investors. These big banks and financial institutions are laying focus on this technology and are also planning to conduct the research thereby helping its users by conducting new research.
  • SBI, along with IBM, Microsoft, Skylark, KPMG and ten commercial banks, plans to roll out Bank chain, by sharing information amongst banks. This can be used to tackle frauds and streamline the lending process and tackle bad loans. With the help of digitally signed shared documents, the employees can make an informed decision about whether to process a loan or not.

Summary:

The blockchain is still in its beginning phase, and there are a lot of hidden potentials that can be tapped after proper research in this field. Even now it is growing by leaps and bounds due to its amazing and beneficial concept, but still, it has a long way to go. Even now it is changing the future of currency, and in the coming days will introduce some other amazing changes as well with the help of various innovations taking place.

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Rithesh Raghavan

Rithesh Raghavan

Rithesh Raghavan, Co-Founder, and Director at Acodez IT Solutions, who has a rich experience of 14+ years in Digital Marketing. Between his busy schedule, whenever he finds the time he writes up his thoughts on the latest trends and developments in the world of IT and software development. All thanks to his master brain behind the gleaming success of Acodez IT Solutions.

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