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If you keep tabs on the fintech, then you’re already well familiar with the hype machine known as blockchain. But, there are still plenty of folks who have either never heard of the blockchain or misunderstand the technology and it’s potential.
Even if you’re not interested or involved with fintech, the blockchain has the potential to impact your life both personally and professionally. This isn’t just hyperbole. The blockchain is going to be the next thing.
And, that’s why it’s vital that you get caught up to speed on its past, present and future.
One of the simplest explanations of the blockchain is from investopedia
A blockchain is a public ledger of all cryptocurrency transactions that have ever been executed. It is constantly growing as ‘completed’ blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order. Each node (computer connected to the Bitcoin network using a client that performs the task of validating and relaying transactions) gets a copy of the blockchain, which gets downloaded automatically upon joining the Bitcoin network. The blockchain has complete information about the addresses and their balances right from the genesis block to the most recently completed block.
No more payment scams
One of the most talked about advantages involving blockchain technology is how it can prevent future payment scams. For starters, it would protect both buyers and sellers by using “smart contracts.” This procedure would avoid those instances where you purchase an item and the seller doesn’t follow through.
Another way that scams are thwarted is that since all transactions are recorded, a coin can’t be used for double-spending or counterfeited. Once a coin, token or electronic currency is spent, it can’t be used again.
Quick Transactions Reduced costs
Interbank transactions can potentially take days for clearing and final settlement, especially outside of working hours. Blockchain transactions can reduce transaction times to minutes and are processed 24/7.
Additionally, by eliminating third party intermediaries and overhead costs for exchanging assets, blockchains have the potential to greatly reduce transaction fees.
Unlike bitcoin, the blockchain is constantly evolving and can extend beyond cryptocurrency. Here are few important points which make blockchain so popular:
- It can transfer value or information in a secure manner.
- It can facilitate, as well as track, “Smart Contracts.”
- Removes intermediaries and allows the end user to interact directly with the ledger.
- Reduces the cost of transferring value and money anywhere in the world for next to nothing.
- Provides almost instant, secure, and borderless transactions.
- Can automate payment protocols that are permanent, irreversible and tamper-proof.
Blockchain is just the beginning. In fact, expect the technology to continue to improve and evolve in the immediate future. Blockchain holds enormous potential to break down barriers that could lead to more efficiency, greater accountability, lower costs, and increased remuneration.
To reap these benefits, however, the technology will need to be developed responsibly within the right regulatory frameworks.
Let us know what do you think about Blockchain?
Microtek Systems Inc is a global provider of Information Technology Consulting and software solutions that help organizations gain competitive edge and transform into digital enterprises.