Blockchain technology is one of the newest buzzwords in different parts of the world today. However, despite its ever rising fame, this technology is still among the most elusive concepts. But, there is really no need for it to be such a complicated thing. In fact, the concept is rather simple the moment you get a good understanding of the theory and architecture of basic crypto economics. Once you get that “Aha” moment, Blockchain technology will never be as complex as it used to be.
A lot of people are aware of Bitcoin and the technology behind it but the potential uses of blockchain extend more than the digital currencies. Among its admirers include Richard Branson and Bill Gates, with insurers and banks falling on top of the other in the hopes of being the first to discover how to put it to use.
In this quick guide on the basics of Blockchain, you can look forward to getting a non-technical and clear introduction to one of the commonly misunderstood and transformational technologies these days.
Right now, many people make use of trusted middlemen like banks to make and complete transactions. With the use of Blockchain, suppliers and consumers can connect directly, thus eliminating the need for any third party.
Through cryptography for exchanges to remain secure, Blockchain offers a decentralized database or a digital ledger of transaction which can be seen by everyone who is part of the network. Essentially, the network is a chain of computers which must give an approval to an exchange before it is recorded and verified.
How Blockchain Works in Practice
As for Bitcoin, Blockchain is used for storing details of each of the digital currency’s transaction, with the technology stopping the same Bitcoin on being spent for more than once.
What Makes Blockchain Technology Revolutionary
Blockchain technology can work for almost all kinds of transactions which involve value, such as money, property and goods. It has almost infinite possible uses as well, from collection of taxes to allowing migrants to easily send back money to their family living in countries with difficult banking processes.
Blockchain will also be able to help in reducing fraud since all transactions are going to be distributed and recorded on a public ledger for everyone to see.
Who Uses Blockchain Technology
Theoretically speaking, once Blockchain goes mainstream, everyone who has internet access can use it for making transactions.
Right now, just a very small chunk of the global GDP is being held in the Blockchain as revealed by a survey conducted by the Global Agenda Council of World Economic Forum.
However, the research study conducted by the Forum suggests that it will have a significant increase in the next 10 years as insurers, tech firms and banks see this technology as a means of cutting costs and speeding up settlements.
Some of the companies that are vying to adapt Blockchain technology include Microsoft, IBM, PwC and UBS. The Bank of Canada also experiments with this new technology.