If we go back in time, there were a lot of misconceptions about the Blockchain revolution. Not only misconceptions, but people also had their doubts and uncertainties whether it’s worth adopting or not. Today as we can witness remarkable growth in Blockchain technology, people are eager to learn more about this much-talked-about sensation in the technology world.
To understand the complex nature of the technology, we need to look deep into the origination of this concept, how it works, and the reason it is becoming a center of attention. That way, we will be able to better comprehend its specific uses, making it easier to adopt.
What is blockchain?
Originally, Blockchain technology was developed for securing digital currency, Bitcoin, which has a net worth of nearly $112 Billion US. In the beginning, people often used the term ‘blockchain’ for smart contracts or other digital currencies.
However, blockchain itself is a distributed digital ledger that records transactions anonymously across different users. It records all the events that have taken place and cannot be modified or even deleted once it has been entered into the system.
Traditionally, people use a trusted middleman such as a bank for making financial transactions. However, with blockchain around, it allows consumers and suppliers to connect directly, without the need to involve a third party.
Blockchain is like any regular database. It stores records or data of different past transactions, with distinctive attributes, including:
- Decentralization, which means that no single owner has authority over the added information.
- Consensus, which signifies that different entities or parties store a duplicate copy of the same ledger and everyone in the chain has to agree on every bit of information added.
- ‘Add-only’, which means that no information that already exists can be edited or deleted, instead it can only be added.
- New information doesn’t conflict with what it already added.
- Information is easy to access and replicated by everyone on the network.
With copies of a blockchain ledger stored and updated on computers across the world, there is no central authority that makes independent decisions. The information is reconciled constantly into the database that is further stored in many locations. The records are public and verifiable and exist simultaneously in multiple places, making it difficult to be hacked.
Blockchain technology has the potential to completely change the way we can store, share, or manage data and transfer value. This is what makes it so important.
When did it become everyone’s center of attention?
Cryptocurrency became a catchword ever since the launch of bitcoin in 2008. However, the technology behind it, i.e., blockchain caught the sight of mainstream just recently. There have been a number of potential uses of blockchain being discovered, such as trade surveillance, Know Your Customer (KYC), Anti-Money Laundering (AML), smart contracts, collateral administration, settlement, and clearing, along with the ability to seize historical and current ownership of high-value items.
What are smart contracts in blockchain?
Fundamentally, smart contracts are agreements that are encoded in blockchain programming and implemented automatically once they meet standard or pre-scripted criteria. Some apparent advantages of smart contracts include:
- Reducing contract implementation costs
- Improving quality
- Increasing speed
Smart contracts can be stored and maintained on the blockchain. These contracts allow safer and credible transactions without intrusion from third parties. A blockchain-based smart contract is visible to all users within a defined blockchain.
Benefits of Blockchain Explained
Blockchain technology offers the following benefits:
Everyone who is a part of a particular blockchain can directly access the ledger. They can review all the records at any moment or whenever they need it. It’s absolutely transparent and open to all system.
While everybody has a duplicate ledger, it’s a completely secure system that is owned democratically by only those who are part of that chain. There’s no solo entity or group who has more power than others. Everyone in the network is the boss equally.
Blockchain transactions process faster than other normal transactions involving a third party or a middleman because of the self-validation facility.
Blockchain can speed up your transactions as well as cut expense costs related to third-parties such as banks as well as diminishing the risk of deception. This means faster, more affordable, and even more secure ways of the transaction for everyone in the blockchain network.
So, is it a good time to become a part of this Blockchain revolution?
We’d say why not, though it is still has a long way to go.
Although, blockchain has received positive acclaim about how technology has revolutionized the financial industry, yet the cutting-edge technology is still in its youth. It is still an emerging technology, however, once it has it will offer potential benefits in other fields such as healthcare, government, retail, FMCG, insurance as well as education.
Blockchain’s real-world uses today include Bitcoin, provenance and land registry. Though the future potential uses are expected to cover, and in many ways, are already covering healthcare records management, insurance, digital identity, voting systems, and supplier contract management and smart execution.
Blockchain, like any other technology, does bring its own set of challenges, since the technology is still developing. Thus, we can say that it’s legal and regulatory status right now is uncertain. Other worries that are of concern include its integration and universal adoption across all industries.
Nonetheless, the possibilities of Blockchain success seem promising. Like all significant paradigm shifts, there will be winners and losers. Though, if we do this right, blockchain technology can escort us towards a dynamic age of prosperity for everyone.
In fact, it can be foreseen that blockchain will become an integral part of our individual as well as professional lives in the very near future. Moreover, the way small and medium sized businesses are adopting this technology, it is quite possible that blockchain will be ruling the industries.