Blockchain Technology :
The blockchain is the revolutionary technology of the upcoming time. To take benefits from this unique technology financial institutions want to do experiment with this to check its operational efficiency. This fascinating piece of technology will surely change our world. To know the advantages of this blockchain technology and also to get the idea that how it can be a revolution in the future you need to know that what the meaning of Blockchain is.
Before understanding blockchain you should know about Distributed Ledger Technology.
Distributed Ledger Technology:
It is the technology that helps to record the transactions and the details of transactions get recorded in multiple sites at the same time. The traditional databases were based on central data store but the distributed ledger technology has no central authority. It spread across several nodes and each node replicates the identical copy of ledger and then save it. All the updates to the ledger constructed by each node independently.
What is Blockchain?
The blockchain is one of the forms of the distributed ledger. The blockchains store data in the form of blocks whereas all distributed ledgers don’t use a chain of blocks to secure distributed consensus. You can say that every blockchain is the distributed ledger but not all distributed ledger is the blockchain. There is the requirement of a peer-to-peer network to manage it. The database replication helps to maintain the quality of the blockchain.
As it is the form of distributed ledger technology it doesn’t require any centralized authority or server to manage it. This technology design helps to share data with safety and transparency and consumers will also be able to see that how the corporation is handling their data. The blockchain has a different structure and that is the reason it is different from other distributed ledgers. There are blocks to organize the data and all the blocks have a link between them.
The blockchain is the list of data that continuously adding in the records. There is no any way to delete or alter the entered data on the blocks. It suits for various things that include:
The Blockchain is based on decentralized trust and this technology better suit Bitcoin and many more. The encrypted identities help in the interaction between the network participants. Each and every transaction securely adds to the transaction chain that is considered as immutable and after that, it distributes to all other networks. In blockchain, the entire data store in some fixed structures and these structures are “blocks”. There are two components of blocks and these are as follows:
Its Header: The time of block creation, its unique id, and previous block link are considered as metadata and it includes in Header.
Its Content: All the transactions that are done and other instruction statements related to validation included in it.
This system is safe and secure because of its immutable nature. It means that making changing it is very difficult and it is also secured by cryptography. With this technology, different companies and consumers will able to buy and sell data in highly transparent manner.
Example of Functioning of Blockchain in Bitcoin:
- If any person wants to make a payment he has to install wallet app that will act as a bank account. For making any transaction person needs a private key as well as the public key of another person.
- If a person has the access to the required keys then App notifies about miners. These miners do verification that person has enough bitcoins for the payment or not.
- All the transactions that occur in a given time grouped in specific structures for the process of verification that are blocks. The blocks distinguish from each other from unique Ids, creation time, and with previous block’s reference.
- After adding a new block to the network the miner will do cryptographic computations legitimately.
- After this cryptographic computation, the discovery of new block announces in front of the network and then new block will join in the chain. This is the reason its name is blockchain technology.
- It takes very short time period to get the confirmation that transaction has done between two parties.
The blockchain database maintains all the data from prior blocks to latest blocks or from beginning. This makes data transparent among all individuals. There are lots of participants in it and this is the reason that all the hackers or malicious actors are unable to overthrow the verification process.
What are the Benefits of Blockchain Technology?
The Blockchain technology will bring tremendous changes in many industries; there are some revolutionary benefits of this technology.
It uses transparent solutions to make communication with the customers and there is no need to involve the third party to validate transactions.
Transparency and trust
This system maintains the trust because everything that is available on this is transparent and everyone can see it. All the transactions that done on it is publicly recorded and this is the reason it is transparent.
No third party can make changes in the data that is once written in the blockchain because it is very difficult to change it. You can consider it as immutable because making changes is difficult.
This system work with cluster of thousands of nodes in a network and these nodes connect to the blockchain through peer to peer network. Its design is able to avoid all failure even at a single point. The network is highly available because inaccessibility of any node will not stop the running of work.
All the transactions that will perform on a blockchain help to provide security and integrity. This system is also protected from all the hacking and frauds. In blockchain technology, everything performs in a decentralized way and this is the reason all the data process in the transparent way to maintain the integrity and security.
The disparate nature of the system in organizations that include finance and health make it difficult to maintain their own databases. It is also tough to share data because all the entities that is responsible to maintain this data works in a disorganized manner. The blockchain makes all these things easy because it serves as a single shared ledger. This helps to reduce the complexity of the system and make it simple.
It is very beneficial to the financial industry because it avoids all the lengthy processes of verification, clearance, and reconciliation for post-trade settlement functions. It is the quicker way of dealings.
It is the cost-effective way and it eliminates all the costs that you need to pay to the third party. Blockchain model doesn’t need the third party or clearing houses and this is the reason there is no need for overhead costs.
Block Chain Technology is Upcoming Revolution:
The blockchain technology has a large impact on different industries and it has power to tremendously affect the various business models with their operating processes. It is applicable at every place where there is a requirement of ledger and transaction authenticity. This will bring massive change in the accounting system and payment settlement. It is a tool that will record all the transactions with security and also make it available to the public.
blockchain technology is considered as revolutionary because of the confidence that it will create among the counterparties. It is based on peer to peer transactions and has only one database. This is the reason after any disagreement there is no need to call any lawyer.
There are a wide variety of businesses that are experimenting with this technology to get different benefits because of its positive impact. This technology is not limited to bitcoin but it is beyond it. If users from different industries will use blockchain technology then we will able to get more digitally integrate economy and this will help in more growth. More growth means there is a decrease in poverty.
To manage any business we require trusted administrators to manage all the records and blockchain technology has potential to offer the secure management of data. In finance, we need the third party to do any transaction but here in the Blockchain technology, there is no need for the third party. This uniqueness is the beauty of the blockchain. It is still an emerging technology but it will bring a major transformation in the future of the financial industry.
When the internet came it was a game changer for many industries and blockchain technology will bring the same revolution as internet brought in different industries. There are many big brands that are embracing this new technology of the upcoming era. The visionary companies know very well that it is very beneficial to embrace this new technology. Other marketing leaders must embrace this big change to get the benefits of this safe and secure technology.