"The blockchain is an incorruptible digital ledger of economic transaction that can be programmed to record not just financial transactions but virtually everthing of value". - Don & Alex Tapscott, authors Blockchain Revolution (2016).
A blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by cluster of computers not owned by any single entity. Each these blocks data are secured and bound to each other using cryptographic principle. So, what is so special about it and why are we saying that it has industry disrupting capabilities?
The blockchain network has no central authority -- it is the very defination of a democratized system. Since it is a shared and immutable ledger, the information in it is open for anyone and everyone to see. Hence, anything that is built on the blockchain is by its very nature transparent and everyone involved is accountable for their actions.
The Three Pillars of Blockchain Technology -
Here are the main highlight of crypto and blockchain technology:
1. Decentralization : This is the main highlight of crypto and blockchain technology which refers to any kind of technology that has no governing authority by any orgatnizations. The idea is very simple. You have a centralized entity that stored all the data and you'd have to interact solely with this entity to get whatever information you required. Bitcoin and BitTorrent are used to centralize services.
Another example of a centralized system is the banks. They store all your money, and th only way that you can pay someone is by going through the bank.
2. Immutability : Each block is linked to the previous block with transactions added in upend only made. Any modification in the content of a block invalidates the linkageand hence the entire Blockchain.
3. Transparency : One of the most interesting and misunderstood concepts in blockchain is "transparency". Some people say that blockchain gives you privacy while some say that it is transparent. Why do you think that happens?
How it works? -
•A blokchain carries no transaction cost. The blockchain is a simple yet clever way of passing information from A to B in a fully automated and safe manner. Only party to a transaction initiates the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed aroud the net. The varified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. Falsifying a single record would mean falsifying the entire chain in millions of instances. That is virually impossible. Bitcoin uses this model for monetary transactions, but it can be deployed in many others ways.
• Think of a railway company. We buy tickets on an app or the web. The credit card company takes a cut for processing the transaction. With blockchain, not only can the railway operator save on credit card processing fees, it can move the entire ticketing process to the blockchain. The two parties in the transaction are the railway company and the passenger. The ticket is a block, which will be added to a ticket blockchain. Just as a monetary transaction on blockchain is a unique, independently verifiable and true and safe record, so can your ticket be. Incidentally, the final ticket blockchain is also a record of all transactions for, say, a certain train route, or even the entire network, comprising every ticket ever sold, every journey ever taken.
• But the key here is this: it's free. Not only can the blockchain transfer and store money, but it can also replace all process and business models which rely on charging a small fee for a transaction between two parties.
• Because blokchain transactions are free, you can charge minuscule amounts, say 1/100 of a cent for a video view or article read. Why should I pay The Economist or National Geographic an annual subscription fee if I can pay per article on Facebook or my favoriate chat app. Again, remember that blockchain transactions carry no transaction cost. You can charge for anything in any amount without worrying about third parties cutting into your profits.
• Blockchain may make selling recorded music profitable again for artists by cutting out music companies and distributors like Apple or Spotify. The music you buy could even be encoded in the blockchain itself, making it a cloud archive for any song purchased. Because the amounts charged can be so small, subscription and streaming services will become irrelevant.
What New Applications will it bring Us ? -
The blockchain gives internet users the ability to create value and authenticates digital information. What new business applications will result from this?
Smart Contracts : Distributed ledgers enable the coding of simple contracts that will execute when specified conditions are met.
The Sharing Economy : With companies like Uber and Airbnb flourishing, the sharing economy is already a proven success. Currently, however, users who want to hail a ride-sharing service have to rely on an intermediary like Uber. By enabling peer-to-peer payments, the blockchain opens the door to direct interaction between parties - a truly decentralized sharing economy results.
Crowd Funding : Crowdfunding initiatives like Kickstarter and Gofundme are doing the advance work for the emerging peer-to-peer economy. The popularity of these sites suggests people want to have a direct say in product development. Blockchains take this interest to the next level, potentially creating crowd-sourced venture capital funds.
Governance : Consumers increasingly want to know that the ethical claims companies make about their products are real. Distributed ledgers provide an easy way to certify that the back stories of the things we buy are genuine. Transparency comes with blockchain-based time stamping of a date and location.
File Storage : Decentralizing file storage on the internet brings clear benefits. Distributing data throughout the network protects file from getting hacked or lost.
Prediction markets : The crowed sourcing of predictions on event probability is proven to have a high degree of accuracy. Averaging opinions cancels out the unexamined biases that distort judgement. Prediction markets that payout according to event outcomes are already active.
Protection of Intellectual Property: As is well known, digital information can be infinitely reproduced and disturbed widely thanks to the internet. This has given web users globally a goldmine of free content. However, copyright holder have not been so lucky, loosing control over their intellectual property and suffering financially as a consequence. Smart contracts can protect copyright and automate the sale of creative world online, eliminating the risk of file copying and redistribution.
Internet of Things : What is IoT? The network-controlled management of certain types of electronic devices - for instance, the monitoring of air temperature in a storage facility. Smart contracts make automation of remote system management possible. A combination of software, sensors and the network facilitates an exchange of data between object and mechanism. The result increases system efficiency and improves cost monitoring.
Neighborhood Microgrids : Blockchain technology enables the buying and selling of the renewable energy generated by neighborhood microgrids. When solar panel make excess energy, Ethereum-based smart contracts automatically redistribute it. Similar types of smart contract automation will have many other applications as the IoT becomes a reality.
AML nad KYC : Anti-money laundering (AML) and know your customer (KYC) practices have a strong potential for being adapted to the Blockchain. Currently, financial institutions must perform a labour intensive multi-step process for each new customer. KYC costs could be reduced through cross-institution client verification and at the same time increase monitoring and analysis effectiveness.
Data Management : Today, in exchange for their personal data people can use social media plateforms like Facebook for free. In future, users will have the ability to manage and sell the data their online activity generates. Because it can be easily distributed in small fractional amounts, Bitcoin - or something like it - will most likely be the currency that gets used for this type of transaction.
Stock trading : The potential for added efficiency in share settelment makes a strong use case for blockchains in stock trading, when executed peer-to-peer, trade confirmation become almost instantaneous (as opposed to taking three days for clearance). Potentially, this means intermediaries - such as the clearing house, auditors and custodians - get removed from the process.
Benefits of Blockchain Technology -
Security : Blockchain is considered to be a highly secure system due to its digital signature and encryption. The system is specially designed to be secure, convenient, and tamper-proof.
Fraud Controll : A system that is based on data stored in a number of places is immune to hackers; it's not that easy to get access to it, and if so, any piece of information can be easily recovered.
Transparency : Banks, as well as the clients, are immediately notified about the completion of transactions, which is both convenient and trustworthy.
No Hidden Fee : Forget about fees, and commissions -as the system is decentralized, there's no need to pay intermediaries.
Access levels : Users have to choose between public blockchain networks available for anyone and the one requiring permission where each node should be authorized first for the user to enter.
Speed : Transactions are processed way faster than usual as there is no need to include payment systems, which reduce the cost and increases the processing speed.
0 Comments
If you have any problem, then please contact us.