You must have heard about the Bitcoin. If not, here’s a link on Bitcoin basics. Bitcoin applies peer to peer transactions implemented on blockchain technology. So, the question is blockchain technology?
Well, a relatively new and rapidly developing concept, blockchain is a type of distributed ledger that contains unchangeable digital data recorded in packages referred to as blocks. These blocks are stored linearly, and each block in the chain comprises data that is hashed using cryptography. New blocks are created from the already existing ones in the chain which ensures that data in the entire blockchain cannot be modified. Although initially developed to track bitcoin transactions, blockchain technology which uses distributed ledger systems is increasingly becoming an inspiration for other commercial applications today.
Currently, the blockchain technology is mainly used to authenticate digital currencies transactions, code and document them into blockchains. By so doing, indelible records that cannot be modified are created. They can be validated by many people using the blockchains, unlike the traditional single centralized verification authority.
Benefits of Blockchain Technology
Blockchains technology help in costs savings. Distributed ledger systems used in blockchain technology enable businesses to streamline processes, which as a result reduces expenses and delays brought about by traditional techniques of reconciling records. Additionally, blockchain technology is cheaper as electronic ledgers are more affordable to maintain compared to conventional accounting ledgers. Electronic ledgers are not prone to errors and therefore result in fewer mistakes as well as reduce records redundancy. The technology dramatically lessens processing delays which means faster services processing for users.
How Blockchain Technology will Change the Economy
The adoption of the blockchain technology is going to bring enormous transformations to the economy. For instance, the financial services industry is one of the sectors that is at the heart of the commercial marketplace. With blockchain, financial institutions will be able to increase value. They will be able to develop, store, exchange, lend, fund, invest, insure as well as securely account for the value that will be able to penetrate new markets and reach the unbanked population. Adopting blockchain technology in banking institutions will enable instant secure and accounted for transactions. Financial institutions will be able to dramatically reduce errors and reduce costs thereby creating a more secure industry.
In accounting, adopting blockchain technology will allow error-free recording. Conventionally, firms use expensive auditing firms that perform double-entry bookkeeping. With blockchain, organizations can implement distributed ledger accounting systems that provide time-stamped records acceptable to business stakeholders by ensuring secure and error-free documents.
With the Internet of Things (IoT) technology developing to connect nearly all objects to the Internet, blockchain will come in to enhance interactions among connected objects and help keep track of secure device communication. Adopting blockchain for government agencies will offer transparency between governments and citizens. By facilitating asset digitization, blockchain technology will drive the shift from an informed view and communication to value where there will be instant secure asset exchanges. It will disrupt all industries that depend on finance, banking, insurance, real estate, legal, education healthcare and more. Blockchain will facilitate issuing, logging, and recording of all business transactions across all industries. It will enable smart contracts, cross-border payments, secure trading, allow transparency and traceability of intellectual property, loyalty, and rewards, digital voting and more.
There is no doubt that blockchain is a disruptive technology that will revolutionize the global economy. It will facilitate secure and transparent exchanges. The faster the world adopts blockchain technology, the quicker we will create secure digital transfers.