The blockchain is transforming our society and economy. Here’s how.
Transformation with blockchain has enabled new and state of the art technologies to reform the way we exchange value.
Considered as the second generation of the Internet, blockchain was introduced with the aim to ease and secure transactional processes. Although a relatively new technology, blockchain is booming. In 2017 the global market for blockchain technology is predicted to become as big as 339.5 million U.S. dollars in size and is forecasted to grow to 2.3 billion U.S. dollars by 2021. Blockchain has experienced success in the form of several applications, the biggest example being the universal cryptocurrency known as bitcoin. Transformation in blockchain has brought this technology much beyond bitcoin and is estimated to transform various markets and industrial sectors by facilitating the evolution of individual and business transactions.
What is blockchain?
Gartner says this about blockchain: Blockchain is a type of distributed ledger in which value exchange transactions (in bitcoin or other tokens) are sequentially grouped into blocks.
However, the technology requires a far more descriptive explanation. Blockchain is an open and public online database or medium that is used for the record and exchange of value-based transactions. It transcends all physical and geographical barriers and uses math and cryptography to enable transactions globally. The uniqueness of blockchain lies in its capacity to store and retain person-to-person transactional history, so that chances of fraud, hacking, and third-party interference are eliminated. These transactions are stored in blocks that cannot be altered. Each consequent transactional block creates a hash pointer and a timestamp in a chronological order, which makes blockchain a reliable and secure platform.
How does blockchain work?
A network of nodes administrates the functioning of Blockchain. This network facilitates transactions between an entire market of individual buyers or sellers and stores it into a group of blocks on each personal computer. This block of value is then broadcasted amongst every party on the network and if accepted, it is added to an existing chain of blocks. Once the transaction is complete, blockchain ensures decentralization and distribution of these transactions so that no single person is in charge. This way it maintains its anonymity as well its transparency. These transactions can involve goods, money, or property. However, the future of Blockchain will witness an increase in its use through the formulation of new and widespread applications.
How is transformation with blockchain enabled?
The most transformative feature of blockchain is its transparency. Since it does not require the interference of banks or governmental institutions as a third-party intermediary, it reduces the chances of manipulation and instances of theft, fraud, and hacking. Each time a transaction occurs, it is recorded in a safe and secure manner. Blockchain is estimated to bring a certain level of security and synchronization in the financial arena. No wonder we are seeing the development of several fintech companies and start-ups. Even automotive, telecom, and healthcare industries are preparing to make upfront investments in blockchain in the near future. Countries like Japan and the US are embracive of this technology, as corporations in these countries are leveraging blockchain in digital identity and content storage, network infrastructure, smart contracts, real estate, app development, and IoT. For the members of the society, the promise of reduced transactional expenditure, secure data ownership, and the elimination of fraudulence should be enough of a convincer. Although a relatively new technology, blockchain has proved its mettle and is now seeing the enthusiasm of investors that are willing to experiment with current and potential uses of the blockchain.
Like every other technology, blockchain too has its limitations and challenges. However, when it comes to dabbling in the experimentation and implementation of blockchain, it depends on how organizations and governments embrace blockchain. Depending on its deployment, the technology can either be disruptive or transformative.
