Informative: Blockchain Technology. What is it?
Blockchain Technology and Cryptocurrencies are terms we’ve been hearing ever since the bitcoin boom in Dec 2017. People have invested in cryptocurrencies, most without even knowing what it is.
Blockchain v Cryptocurrency
You may be confused between Blockchain and Cryptocurrency. When there was just Bitcoin, these 2 terms could be used interchangeably. The Blockchain was in fact created by Satoshi Nakamoto in 2008 as the public ledger for Bitcoin in the first place. However, now that there are more than 1500 different cryptocurrencies, it is important to know the difference between the two.
First off, Blockchain is the technology that Cryptocurrencies exist on. It is a decentralised ledger that does not require the involvement of a central clearing authority. Transactions create a block of data for the ledger when it combines with all other transaction. The block is then added to other blocks to form a chain, hence the name: Blockchain.
Cryptocurrencies are meant to be used as a medium of exchange, a digital currency which is very much like U.S.Dollar or Singapore dollar. Initially, cryptocurrencies like Bitcoin were used to exchange for goods and services by a very small group of people. However, as cryptocurrencies are moving more into the mainstream, and as the speed of confirmation increases, there will be an increasing number of places where cryptocurrencies will be accepted as a form of payment. Cryptocurrencies like Bitcoin is particularly useful in countries with high inflation and where Bitcoin is preferred as a form of payment compared to the countries own currency. Read this article about how Argentina uses blockchain technology here: https://bit.ly/2x2Y5oh
Is this the future?
Personally, I strongly believe that Blockchain and Cryptocurrency will be an integral part of future technology.
I believe that blockchain technology will become an important part of many companies business processes. I also believe that some of the cryptocurrencies available today will remain useful as either a store of value of a medium of exchange.
The benefits of using Blockchain are highly applicable to many companies which have processes that should be improved. The key benefits of blockchain are its traceability, transparency, security, and cost-effectiveness. Blockchain allows you to trace an item to its origin with an audit trail. The blockchain is a distributed ledger, all parties in a network share the same copies, to update the record, all parties in the network must agree to it, this provides greater transparency. Data on the blockchain are stored across a network of computer, being decentralised, this makes hacking very difficult. The blockchain takes away the requirement for a middleman, thus saving costs and making the entire transaction much more efficient.
These key benefits extend the use of blockchain to industries such as supply chain management, accounting, crowdfunding and even the stock exchange. In the digital space, data is one of the biggest concerns. Data protection and preservation is key to ensure usability and consumer confidence.
Financial institutions are now exploring the usage of Blockchain. Global bank UBS is exploring the use of blockchain technology. The President of China, Xi Jinping has called blockchain a ‘breakthrough technology’. There are reports that many financial institutions are experimenting with the blockchain technology as well. This goes to show blockchain is getting widely accepted and experimented with.
References:
https://www.ft.com/content/eb1f8256-7b4b-11e5-a1fe-567b37f80b64
