Technological innovation will be a significant factor which will drive economic growth over the next three decades. In order to sustain and succeed in this continuously emerging economy, enterprises need to understand the driving forces behind technological development, analyze the industries they can impact and predict how they can offer a divine customer experience. In past couple of years, we have witnessed blockchain as one of the most promising development. In this blog, we will have a brief look at what is blockchain technology, the reason behind it’s rising, features, how secure is it, who can use it and why blockchain is called the most disruptive technology of this era or how it could revolutionize the world in the years to come.
What is Blockchain Technology?
Blockchain is not a buzzword for everyone like cloud computing, AR or IoT. IT companies, technology consultants, financial institutions were whirring about blockchain technology. But, blockchain with connection with Bitcoin, just changed the entire global business landscape and took the financial world by storm. We will rarely get an entrepreneur or a professional blind of Blockchain by now. In simple words, blockchain is the answer to the question we have been asking since the advent of the internet era; “How can we trust what is happening online?”
In technological terms, blockchain allows customers and service providers connect directly, without the intervention of a third party when it comes to financial transactions. Blockchain uses cryptography to make the transactions more secure and quicker. A decentralized database has been used, (which is called ‘digital ledger’) so that everyone can see the transactions online. As the name implies “Blockchain” – is a structure where blocks connected together as a chain, transactions are arranged together to form a logical data container and customers (called as nodes) can do their transaction without any authentication. Information can be shared and regulated, as records are public and can be verified easily. This reduces the chances of cyber threats as there is no centralized data. Data is available to anyone as the network is hosted by millions of computers at the same time. There are also private blockchain networks managed by central admins.
The Rise of Blockchain
As per many experts, 2017 was the year of bitcoins. But, it would be more relevant to call it the year of the blockchain. Cryptocurrency market has gathered jaw-dropping attention because of the rise in bitcoin’s value. The blockchain technology made cryptocurrency transaction significant. With all these chaos around bitcoins, one can certainly say that the future of the blockchain era has finally arrived.
People who remain cynical of Bitcoin will always assume that cryptocurrencies and blockchain technology have fallen short of its initial purpose, which was to be a widely used medium for online transaction. While in many cases, service providers have not embraced bitcoin completely, you can’t deny the fact that cryptocurrency has seen notable circulation in few countries. Though many governments are still uncertain about the future of bitcoins due to its decentralized nature; however, this couldn’t impact government officials in Russia and Singapore from implementing high-end blockchain solutions. These two countries have now electronic versions of their national currencies. Financial service providers like MasterCard, Fidelity Investments, retail banking leader JPMorgan Chase has shown immense interest in blockchain and working with technology companies that develop blockchain applications.
4 Key Features of Blockchain
Blockchain is still in its initial stages. In coming few years, we will witness many changes in this technology. But, one thing is for sure that this will disrupt many industries and make financial transactions more secure, transparent and efficient. What made blockchain a robust technology? These features.
The concept of blockchain is mainly based on decentralisation, which means there won’t be any involvement of a third party. Both service provider and a customer will have equal power without depending on an external entity.
Though blockchain can be private; however one of the major features of blockchain is its transparency. The concept of blockchain was made for making all the transactions transparent and available to anyone.
As we mentioned about transparency, any changes to public blockchain are viewable by all the users. We have to trust the data written in the blocks. The transactions are immutable, means can’t be changed, altered or deleted.
Integrity & Reliability
Due to its decentralized nature, there is no central point of failure of the blockchain. With this, the fear of malicious attacks is lessened. Because of cryptography, blockchain system is highly reliable.
Who are using blockchain & is it Secure?
The third quarter of 2017 was a crazy one for blockchain companies and investors. And the final quarter of 2017 proved that blockchain is about to have an impact on every industry. While banking & financial companies were the obvious ones of being ahead of the curve, even other industries like real-estate, education, social media and security are being disrupted by blockchain-driven start-ups. Blockchain technology is the result of intense research of decades in cryptography and cybersecurity. This offers a completely different approach to store information, making transactions, and eliminating chances of cyber threats. Because of this company like Lockheed Martin had bet on blockchain for cybersecurity. There are few striking global banks & financial institutes as well as few governments who have measured blockchain and are now on the verge to adopt it.
There are various start-ups using blockchain to promote transparency and trustworthiness within the digital information ecosystem. Many industries are coming forward to embrace blockchain tech, but here are six industries where blockchain will rule in near future.
As per an Everest Group’s market research report; more than 60 global banks and financial institutions are researching and working on blockchain-based applications. Few of them are;
Similarly, government bodies in the US as well as around the world have been analyzing blockchain’s security and benefits. Below states & countries are among those who have trusted blockchain’s security and are moving steadily towards adopting the tech.
Now the question arises, what made blockchain secure? Well, as we already discussed, blockchain transactions are secured by cryptography and are tied (in the chain) to previous records or transactions. The transaction records are distributed and can be seen by all the participants or nodes of the distributed ledger. If any hacker wants to hack the data, then he needs to change all the previous records in the blockchain, which is irritable. Blockchain transactions are validated by algorithms & provide transparency. This made blockchain one of the most secure digital inclinations available today.
Why Blockchain is a disruptive technology & what is there for future?
The financial industry is all set for a transformation. With the advent of blockchain tech, we analyzed few things that the financial industry does: it stores, transits, lends and trades money. People say blockchain is only useful for certain industries and not meant for every industry. But, the reality is blockchain holds the potential to transform any industry, creating a more productive ecosystem where customers get a chance to participate in the value they create.
When the internet started to take its shape in the 90’s, few people had doubts in their minds and were sceptical of its growth. As blockchain is the technology behind all cryptocurrencies like bitcoin and ethereum, it has the potential of revolutionizing the way we work and manage financial transactions; making it more reliable, efficient and trustworthy. Transactions once recorded on the blockchain are open for audit and will be stored there forever. It is impossible to change any record. Money transaction is a system of trust, trust adds a lot of value, and this system is essentially trustworthy. We all hold equal control and everyone is accountable for everything. Unlike everyone is accountable for a central control body like a bank or government who can be corrupted to misuse people’s money and break their trust.
Almost every progressive company has a team working on blockchain technology, innovating ways it can be used for various applications. Just like the wheel was a better way to move stuff around, just like the printing press was a better way to copy and make literature, the blockchain is a better way to do business, so eventually, it will catch on. Seeing the investments, research, exploration, adoption and implementations, we are sure that blockchain is not just a fad.