six Reasons Why Blockchain is Worth Getting Excited
If you keep tabs on the fintech, then you’re already well familiar with the hype machine known as blockchain. But, there are still slew of folks who have either never heard of the blockchain or misunderstand the technology and it’s potential.
What’s the big deal, then?
Even if you’re not interested or involved with fintech, the blockchain has the potential to influence your life both personally and professionally. This isn’t just hyperbole. The blockchain is going to be the next thing.
And, that’s why it’s vital that you get caught up to speed on its past, present and future.
What is blockchain and where did it come from?
One of the simplest explanations of the a blockchain is from Gizmodo: “The blockchain is a ordinary digital platform for recording and verifying transactions so that other people can’t erase them later — and anyone can see them.”
For the techies out there, the blockchain is an anonymous peer-to-peer payment system that relies on secure cryptographic protocols. It uses a public ledger and database to record all record transactions. However, it’s decentralized. This means that there is no governing figure controlling the blockchain.
If that sounds like bitcoin to you, then you’d be correct. The blockchain was built using the bitcoin system that was released by Satoshi Nakamoto" in 2009. Albeit, the idea of cryptocurrency can be traced back to the work of David Chaum and his invention known as DigiCash back in the 1980s.
“The blockchain ledger helps to provide transparency for transactions. Albeit many bitcoin transactions are in some ways anonymous, the blockchain ledger can link individuals and companies to bitcoin purchases and ownership by permitting individual parties, called miners, to process payments and verify transactions. Rather than a central company presiding over the use of bitcoin, these blockchain originators serve central roles in the management and administration of this alternative currency system," Techopedia further explains.
In other words, the blockchain is actually composed of single transactions known as “blocks.” Each block links together and forms a accomplish bank history of transactions. Once a block is linked, it cannot be edited.
Unlike bitcoin, the blockchain is permanently evolving and can extend beyond cryptocurrency. Before we get much further, here are a duo key pointers to reminisce from BitcoinHub:
- It can transfer value or information in a secure manner.
- It can facilitate, as well as track, “Brainy Contracts.”
- Eliminates intermediaries and permits the end user to interact directly with the ledger.
- Reduces the cost of transferring value and money anywhere in the world for next to nothing.
- Provides almost instant, secure, and borderless transactions.
- Can automate payment protocols that are permanent, irreversible and tamper-proof.
Why are people excited about blockchain?
This is a indeed good question. And, there isn’t just one response. Almost everyone can agree that the blockchain is one of the most interesting and disruptive compels to come along in fairly some time. And, that’s because the blockchain is able to:
1. Prevents payment scams.
One of the most talked about advantages involving blockchain technology is how it can prevent future payment scams. For starters, it would protect both buyers and sellers by using “clever contracts.” This procedure would avoid those instances where you purchase an item and the seller doesn’t go after through.
Another way that scams are thwarted is that since all transactions are recorded, a coin can’t be used for double-spending or counterfeited. Once a coin, token or electronic currency is spent, it can’t be used again.
There’s also the possibility that companies and individuals can no longer “cook the books” or price gouge customers. Again, since every transaction is recorded, every cent is accounted for and would prevent an Enron type situation. Price gouging could be a thing of the past since it would protect intellectual property by being collective publicly on the blockchain.
The most discussed perk is how secure the blockchain is. Besides transactions being placed in the ledger, it is secure because transactions are directly inbetween two parties that require a unique signature to authorize the transaction. Without third parties and the signature, coins and token can’t be altered.
Two. Cuts out the middleman.
The blockchain is a peer-to-peer system, meaning that transactions are inbetween you and another party. This plain two party only, could be a real game changer. We use this to be able to facilitate cheap ecash transactions across the world. For example, you could send friends or family money anywhere in the world without having to pay for the transaction or currency fees that traditional banking or financial institutions have used.
Chris Dunn from Skill Incubator is excited about the emergence of decentralized marketplaces. This fresh type of online market can cut out middlemen like Amazon and Ebay. For example, in April of two thousand sixteen OpenBazaar launched their zero percent fee marketplace that offers the use of Bitcoin to buy and sell products. And with trading volume in Japan on the rise, decentralized marketplaces in Asia are primed to reduce friction with international e-commerce.
The technology could also liquidate all of the lawyers, realtors, and banks when transferring a property title or house deed. This would not only save you a bundle in fees, it would also speed the process up from a day to hours.
Three. Lodges transactions in minutes.
Imagine being able to send and receive money from across the globe in just a matter of minutes. How about receiving a signed contract or vehicle title in just a day? No matter the screenplay, blockchain decentralized and the P2P system permits you to lodge any digital wallet transaction quickly, as opposed to waiting days or weeks.
Four. Increases storage.
Cloud storage is an incredible development. But, you don’t have any control of the storage infrastructure. It’s in the forearms of Google, Dropbox, Facebook or Apple. And, that could become a concern if you value your privacy. Since you’ll need an encryption key to access your data, you can rest assure that no one else can access it except you.
Also, companies like Storj offers more cloud storage at a cheaper rate than Dropbox.
6. Prizes users.
Who doesn’t love prize programs? The blockchain can improve loyalty programs by providing customers the capability to trade points among each other since the transactions would be placed in the public ledger. It would also open up the possibility of using points at different vendors. For example, you could use some of your airline points at your dearest coffee shop or eCommerce site.
Because of those capabilities, the blockchain will be able to disrupt the following;
- Finance — Blockchain will liquidate the need for traditional banking and financial institutions by substituting back-office systems with a P2P system.
- Contracts — Chris DeRose states that ‘clever contracts’ will be used, which is “a financial security held in escrow by a network that is routed to recipients based on future events, and a computer code.” Besides, contracts, deeds, titles, and other significant documentation will be collective on the public ledger.
- Patents and Copyright — Whether it’s a fresh innovation, gaming app or chunk of music, the blockchain can prove that you had ownership of the intellectual property very first.
- Voting — When people cast their ballots, it will be recorded during elections.
- Collectibles — The blockchain could be used to track and validate scarce or limited items like coupons or a chunk of artwork.
- Bills of Lading — Cryptographic signatures can be used to eliminate distrust on everything from shipped products to switching shifts at work.
As Dominic Frisby ideally states on Cherry.com, “the ownership of just about anything can be recorded and traded using the blockchain.” We’re even eyeing the tech being used for everything from live-streaming to mining light bulbs to creating one digital identity that would substitute all of those usernames and passwords you have.
Because of this, blockchain technology actually has the potential to switch the world. And, that’s why there’s so much whirr surrounding it.
Where is the blockchain headed?
Blockchain is just the beginning. In fact, expect the technology to proceed to improve and evolve in the instant future.
According to Andrew Keys on CoinDesk, keep a particularly close eye on:
- Ethereum, a public cryptocurrency and a blockchain platform with clever contract functionality, will predominate the industry.
- Get familiar with "brainy contracts." They’re going to be the future of blockchain.
- "Merkle tree" and "proof-of-stake" will become buzzwords.
- Cloud services, such as Microsoft's Azure platform, “will provide a safe place for fresh developers to wrap their goes around concepts such as clever contracts while applying them to their corporation’s ache points.”
- Regulators and governments will ultimately embark to understand blockchain and embrace it.
- Don’t expect bitcoin or or any other digital currencies to get much fatter.
- The hype surrounding blockchain won’t die down. It’s only going to get fatter as more startups and fintech businesses proceed to expand on blockchain tech.