11 Apr The implications and impact of blockchain technology
Blockchain technology is the technology behind bitcoin. Bitcoin as you may know is a type of digital currency in which gives units to conduct both online transactions. And while the technology has not reached a global dominance, the bitcoin has taken off in various countries (primarily in the East). Blockchaiin technology, regardless of whether Bitcoin goes out, will be here to stay. It is such a big breakthrough in technology that some are stating that it will revolutionise the world. Here is how.
Transparency of Spending
When transactions are conducted using block chain technology, there is an immediate recording of the transaction onto a shared ledger. This ledger has thousands upon thousands of copies globally. The benefit is that when a transaction occurs, it is there to stay. No one can alter the information. The result is that businesses, politicians, and individuals cannot cover up there spending and allocation of funds. It would be rather difficult to do so. Consider. If there are 50,000 shared ledgers, that person would need to alter those sources individually which is not likely to happen.
As businesses are more transparent with the blockchain, it can be concluded that investors would be more apt to invest in companies which use such technology. They would be able to determine where their funds would be spent as well as the actual ROI on their investment based upon the transparent spending trends of the past.
A no hack world of commerce
Due to the blockchain recording the transactions on multiple ledgers, it is impossible to hack. Even if a person were to hack one of the ledgers, all of the other ledgers would remain the same. The blockchain would show that there is a discrepancy. So where there may be one hack, the blockchain would immediately notify that sector that there is a discrepancy in the chain and it would be fixed. 51% of the existing nodes must agree that the information is accurate. So any new node which is added to the block chain must be non-fraudulent.
The elimination of the third party financial infrastructure
Blockchain technology would take out the need to have a banking institution for online financial transactions. Africa and the Philippines have already started leapfrogging over the traditional means of online finances. Because the traditional online transactions require credit cards, banking cards, and/or some other form of financial institution involvement. However, with blockchain technology there would not be any physical currency but would allow for a secured measure of commerce.
What happens to FDIC securities?
Since the blockchain is not controlled by government agencies, as of now, there are some real concerns as to the financial securities which will come into play. Currently, financial institutions tend to have FDIC insurance on investments. So, if you have financial transactions which are not secured by the government, you are essentially basing the transactions between individuals and companies based upon the trust that a person has towards a company. But the issue which arises is that people and companies are not trustworthy. This is a major concern. If you have money which is being transferred, even with a blockchain which has nodes upon nodes that catalog information, you are very open to financial loss at this time. Yes, you have a ledger of the transactions but what does that matter if the company does not secure your investments.
Blockchains really do not matter. It is WHAT product the blockchain connects to
The bottom line is that blockchain is only a ledger, nothing more. No one is going to go around stating that they are using blockchain but rather that they have a product built upon the blockchain system. The products which are associated with the blockchain is what needs to be noted. You have storage/cloud based services which can be based upon blockchain technology which secures data over nodes, then you have online marketing and trading (like Ebay) which would not require a financial institution, there is tracking of antiquities, records of history, and of course there is the actual bitcoin.
You cannot buy blockchain just as blockchain. You have to buy the product which has the blockchain technology.
Will Blockchains revolutionize the world?
If you think of blockchains in the same way that you would think of underlying scripts, then yes, it will revolutionise the way in which certain products are made and distributed digitally. Will the blockchain out do the traditional form of currency? No, it is very unlikely that the financial institutions which have been around for hundreds of years will change due to the bitcoin. Then again, no one thought that INTEL technology would have the impact that it has had. Blockchain may do so, it is a bit too early to tell.
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