My article in BrandsIT dated May 28, 2018.
Blockchain is a universal transaction book, allowing registration and tracking of every operation carried out within it, distributed throughout the Internet in thousands, non-editable copies, in the pre-peer model and secured with advanced cryptographic methods.
The easiest way to compare it is to an accounting book – publicly available, global and allowing each of its users to register and view transactions such as financial transactions, property deeds or eg contracts. But the information who made the transaction is confidential, available only to the owner of the transaction. The programmable, open nature of blockchain technology will completely rebuild the financial sector. And even more – some of its supervisory and accounting elements will be unnecessary. Trade processes, information exchange will become transparent and faster and much cheaper, with no costs incurred for maintaining the entire financial system in the world. Public trust institutions – banks, stock exchanges and financial transaction agents also see great potential in it, but also a threat to the status quo.
I explained how blockchain technology works in an article I posted last year. Now, I would like to discuss its potential to become a universal tool offering useful applications to just about every industry and sector.
One of the most important features of the blockchain is that all users who decide to use this “book” have access to its copy, and each copy automatically registers any changes made within it. Blockchain is a distributed system, which means that there is no central source of processed data.
The security of its use and application, which seems to be its most important feature, results from the application of mathematical algorithms and rules of cryptography. Blockchain can register transactions: sales, exchanges, authorizations, electronic signatures and actually any operation that is associated with the validation of any form of assets.
Specialists say that blockchain needs more than a dozen years of further dissemination and improvement to be globalized. Today, its development and functioning are perceived primarily in the context of the cryptocurrency market. The idea of creating a universal book of all operations was born in an environment that created the first – alternative to the official financial system – currency, Bitcoin (BTC). It can be said that the cryptocurrency world is a specific laboratory in which all the strengths and weaknesses of this technology are verified in continuous use.
Blockchain is growing and will develop. It is too high a quality change in order to threaten the market annihilation. There are a lot of questions that are born on the occasion of its dissemination, and one of them concerns scalability. And this is potentially unlimited.
Until, what benefits the blockchain brings the financial industry the fastest. But we are only at the beginning and the situation can be compared to the moment in which the Internet was in the mid-90s. At that time, nobody ever imagined that the Internet 2.0 revolution would change the essence of the network. Blockchain is still in its first phase of development, but it should soon experience a period of dynamic growth, which in time means a real globalization of the mechanism.
At this point, I would like to point to these spheres of reality, where the blockchain should perform the fastest and the best because of its structural features.