Nowadays, Blockchain is one of the most talked-about technologies in the business right now. Blockchain tech has the potential to manage major changes and create new opportunities across industries. From banking and cybersecurity to intellectual property and healthcare it’s everywhere right now.
Well, you must be thinking of what is blockchain, and what impact will it have on business going ahead?
Cryptocurrencies of all classifications make use of distributed ledger technology known as the blockchain. Blockchains act as deconcentrated systems for recording and documenting transactions that take place involving a particular digital currency.
Put solely, blockchain is a contract ledger that maintains identical copies across each member computer within a network and facilitates the safety of the blockchain.
While Bitcoin and other cryptocurrencies grew popular among the general worlds in late 2017 – 2018, they have become more of a niche area for cryptocurrency enthusiasts.
Though, blockchain automation remains a fast-growing area of growth for companies across a host of industries. It is reachable that this technology will ultimately be seen as the major innovation to come out of the bitcoin boom.
Now, we’ll take a look at blockchain and why it could be a treasure to businesses.
What is blockchain?
“Blockchain is a shared, entrenched ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible or intangible. Virtually anything of value can be traced and traded on a blockchain network, reducing risk and cutting costs for all involved.” – Dummies of Blockchain
There are various ways to erect a blockchain network: can be public, where anyone can join, can be private, where one organization governs the network, permissions, where participants need to obtain permission to join, or built and continued by a consortium of organizations.
Basics of Blockchain
Most blockchain networks have complex rules for the adding of new groups of records, “blocks,” to the chain of previous records.
The blocks and the contents within them are protected by powerful cryptography, which ensures that previous transactions within the network can’t be destroyed. And in this way, blockchain technology allows a digital currency to maintain a trusted transaction network without depending on a central authority.
While blockchain is most famous for its role in settling the rise of digital currencies over the past several years, there are also much other non-crypto currency uses for this technology.
As a matter of fact, some blockchain supporters believe that technology could far outpace cryptocurrencies themselves. In terms of its overall impact and that the real potential of blockchain is only just now being discovered. As such, no doubt that financial advisors and many other investors will encounter blockchain technology much more in the years to come.
Who is Using Blockchain Already?
Bitcoin is the most well-known instance of blockchain technology, but it is joined by a growing number of early supporters. For example, Google, and Deloitte are investing in blockchain projects. And businesses working on blockchain-based services include:
- Spotify, to manage copyrights
- IBM, to assemble a tracking tool for shipping companies and retail chains
- Kodak, to create storage for stock photos
Commonly, the shifting of value has been both expensive and slow, and especially for payments taking place across international borders.
One cause for this is that, when several currencies are involved, the transfer process typically requires the contribution of multiple banks in multiple locations before the intended recipient can actually collect his or her money. As previous services help facilitate this process in a faster way, but these tend to be quite expensive.
This Blockchain technology has the potential to provide a much faster and cheaper substitute for traditional cross-border payment methods. Indeed, while typical money remittance costs might be as high as some percentage of the transfer amount. Blockchain may allow for costs just a fraction of that, as well as guaranteed and real-time transaction processing speeds. There are many problems to be passed, including the regulation of cryptocurrencies in different parts of the world and security concerns. However, this is one of the most promising and famous areas of blockchain technology application.
Supply Chain Uses
For countless businesses across various industries, a key to success is a well-functioning, efficient supply chain. Blockchain technology has already been used in multiple industries. As a means of keeping tabs on supply chains and verifying their efficiency. And could eliminate human work and the potential for error from a complex and crucial process.
In fact, blockchain is a technology with an extraordinarily broad set of potential uses. Whilst, blockchain is most popular for its connections to the blossoming cryptocurrency world, several other applications have already been explored. Possibly even more exciting, though, is that new ways of utilizing blockchain emerge every day. As such, Even if you are directly involved in the digital currency space or not. It’s necessary to develop an understanding of blockchain. Also, how it may be used to transform the business and investment worlds.
Blockchain Integration Into Government Agencies
The idea of the distributed ledger is also winning favor from government authorities that have to administrate very large quantities of data. Right now, each agency has its different database, so they have to constantly require information about residents from each other. Although, the implementation of blockchain technologies for useful data management will improve the functioning of such agencies.
Estonia, a country in Europe has already implemented blockchain technology on the government level. Nearly all public services there have access to X-Road. A decentralized digital ledger that contains information about all residents and citizens. The technology uses modern encryption technology and includes 2-factor authentication. It enabling people to control their own data and be sure of its security.
By 2022, more than a billion people will have some data about them stored on a blockchain, but they may not be aware of it.
Blockchain Meets the IoT
IDC reports that many IoT companies are considering the implementation of blockchain technology in their solutions. Therefore, they expect that nearly 20% of IoT deployments will enable blockchain services.
The cause for this is that blockchain technology can provide a secure and possible to scale framework for communication between IoT devices. While modern security protocols already appeared to be at risk when implemented to IoT devices. Blockchain has already approved its high resistance to cyber-attacks.
Other than that, blockchain will allow smart devices to make automated micro-transactions. Due to its distributed nature, blockchain will conduct transactions faster and cheaper. Moreover, to enable transferring data, IoT devices will leverage smart contracts which will be considered as the agreement between the two parties.
Blockchain in the future will transfigure business processes in many industries, but its adoption requires time and effort. Nonetheless, soon, we can expect that governments will finally accept blockchain benefits and begin to use it for improving financial and public services. Though some blockchain startups will fail, people will get more experience and knowledge on how to use this technology. Blockchain will stimulate people to acquire new skills, while traditional businesses will have to completely reconsider their processes. All in all, by 2021, we can see more examples of the successful implementation of blockchain technology.