When you hear blockchain, it is often associated with a negative perception of Bitcoin and other cryptocurrencies.
Blockchain is not just a buzzword. It is a technological breakthrough that will affect many industries in the coming years.
Let us have a look at the basics of blockchain.
The basics of blockchain
Blockchain is a digital ledger of transactions that can be duplicated and distributed across an entire network of computer systems or “blockchains”. The idea is that every member of the network has an identical copy of the blockchain on their computer at all times.
It provides unprecedented control over information that is secure, verifiable, and immutable, recording not only transactions but digital representations of physical assets. It can be replicated in real-time over a network. Users can issue new assets and transfer real-time ownership to banks, exchanges and payment processors.
Once a transaction has been agreed upon by a consensus algorithm, it is recorded on the blockchain. It is stored on a decentralised network of computers making it more difficult for hackers to compromise transaction records. When a new transaction is approved by the blockchain, it is encrypted and linked to all previous transactions in the block.
You can never erase a record, and blockchain technology is secure and open source.
Blockchain in business
Blockchain has many potential applications in areas such as supply chain, commerce, finance, real estate, and gaming. Businesses use blockchain for a variety of things, for example; managing pharmaceutical information, tracking shipments and tracing the origin of food.
It helps to increase trust, transparency and traceability of customer interactions by breaking down business boundaries and data silos. By eliminating intermediaries, companies can streamline their processes and reduce costs. And by automating traditional document-driven processes, blockchain enables transactions to be processed faster and more efficiently.
While some records are private and require immense protection, they can also be viewed by the relevant authorities, making blockchain a platform that can be used to securely transfer data.
When considering the use of blockchain for business-specific projects, it is wise to evaluate the use of this technology and ensure that there is a real need for it.
The most important thing that early users of blockchain technology should remember is that it is constantly evolving. Companies should make sure they need it before adopting it and can adapt to changes as the technology evolves.
While blockchain can help prevent fraud, it is not foolproof. It is a network of truth machines and it is only as good as the information you put on it.
For now, blockchain remains a niche technology. However, It will be as significant as the Internet when it was first available. It took about 15 to 20 years of having the Internet before we saw Google and Facebook.
It is hard to say where blockchain technology will be in the coming years, but it will significantly transform the way we transact and interact with each other.
Much of its potential being used in more situations and industries will depend on future government policies.