The BlockChain, to begin with is undeniably one of the most ingenious inventions of mankind. Considering it to be the brainchild the pseudonym, Satoshi Nakamoto, the technology has evolved into something unimaginably great. However, the most commonly asked always arises every single time – What is this Blockchain?
A BlockChain is defined as a peer to peer distributed ledger forged by consensus, combined with a system for smart contracts.
-Hyperledger, Linux Foundation
The blockchain technology has turned out to be a new backbone to the digital internet. The technology, having originally devised for the digital currency (more specifically, the Bitcoin), it now has numerous potential uses – most of which have already been discovered.
In layman’s terms, the blockchain is a time-stamped sequence of unchallengeable data records that are managed by group of computers and not under the ownership of any single entity. These blocks of data, known as a ‘block’ are bound together through certain cryptographic principles, known as the ‘chain’, completing the ‘Blockchain’ as a technology. Considering the technology’s link to cryptography, by design, the blockchain is resistant to data modification. Each of these blocks contains cryptographic hash of its previous block making it an open distributed ledger. This means that it can record multiple transactions permanently, which are not only secure, but are also verifiable.
One of the biggest favorable natures of the technology is its lack of central authority. This means that the blockchain technology is the very definition of a democratized system with transparent information on an immutable ledger.
In simpler terms, the working of the technology can be summarized into the following steps:
- Every transaction is put into a block
- Each of these blocks are connected to one before it, and one after it- so, transactions are blocked together.
- Each block is added to the next one, creating an irreversible chain.
Furthermore, the technology easily perceives infrastructural costs; however, it carries no transnational costs. The technology simply passes on information from point A to point B in an ingenious manner that is not only fully automated bust is also safe and secure. This process involves a transaction initiated by one entity in the creation of a block, which is then verified by perhaps millions of computers distributed around the world online. The verified block is then added to a chain that is stored across the net creating a unique record along with a unique history. This essentially means that by falsifying one record, the entire chain would be falsified in various instances – which is virtually not possible. While this gave Cryptocurrency transactions (like the Bitcoin) the perfect model for monetary transactions, the tech community have deployed this technology is many other ways.
Applications of the BlockChain Technology:
Comparing the technology with an example will provide a better understanding of the process. For instance, considering a railway company; the tickets that are bought online are paid for through credit or debit cards. Here, the card company takes a cut to process the transaction. However, with the blockchain, the railway operator not only saves on the extra fee but also can move the entire ticketing process to the blockchain. That is, the two entities participating in the transaction involve the railway company and the passenger. Here, the ticket is a block that is added into the blockchain which is unique, verifiable and unchangeable. Similarly, the blockchain here is also a record of every other transaction, say, the train route or the train network or even every ticket that is ever sold.
The key here is that it’s completely free. The blockchain not only stores or transfers money, but also replaces all models that rely on commissions or transnational fees. And it is because of this that there is no worry about a third party cutting into a person’s profits through the technology.
The lack of transnational fee has helped the tech community evolve the technology into different forums and industries. Blockchain could allow sold recorded music profitable to artists by cutting out on various music companies like Apple or Spotify. Moreover, the music bought could even be encoded into the blockchain itself, creating a type of cloud archive. And since the amounts that are charged for it is so small, subscriptions or streaming devices could become irrelevant. It need not stop here. EBooks fitted with the blockchain technologies and codes would circulate in an encoded form, allowing the authors to gain profitable incomes instead of Amazon or the many credit card companies. While this could prove beneficial to the actual individuals involved in the market, the marketplace all together, however, would then be unnecessary.
The applications of the technology in the financial world are more evident and its ground-breaking changes are more imminent. The technology will have a revolutionary impact on the working of the economy in terms of the stock exchanges, loans and insurances. Proficient use of the technology can essentially eliminate bank accounts and its services, considering the advantages of using a secure ledger.
Growth of the Blockchain Technology:
Here is a list of the growth of the Blockchain technology (Sourced as per Dot Com Infoway):
- The average number of monthly ICO went from 8 to 200
- Ethereum grew 50 times
- ICO investments increased 16 times
- 14 countries explored developing official cryptocurrencies
- $2.1 billion: Global spending on blockchain solutions in 2018
- 3x: The number of blockchain-related LinkedIn job postings more than tripled over the last year
- 20$ Billion: Amount the global blockchain market is expected to be worth in 2024
- 69%: Banks currently experimenting with Blockchain Technology
- 33%: Bankers expecting commercial blockchain adoption next year
- $8 – $12 Billion: Reported potential annual savings for banks utilising Blockchain Technology.
Apart from its ground breaking growth values and secure benefits, understanding the technology proves to be an advantage in various unimaginable ways. Right from reducing multiple burdens to smart contracting and financial banking, the technology plays a significant role in being beneficial in every field of the present global economy.