Unsorted
data is often useless. When sorted, manipulated and stored it becomes one of
the most valuable things on the earth.
Subramanian K
In 2020 alone, about 165 million records of data were exposed. Ever since the recording of data and then processing it
to information, the gap created makes it viable to theft, copying and
difficulties in finding the creator of the information. The solution to these
issues lies in a technology called ‘Blockchain’.
Blockchain is a system of recording
information in a way that makes it difficult or impossible to change, hack or
cheat the system.
A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger.
Image credits: Euromoney Learning
These are some of the properties of Distributed
Ledger Technology @euromoney learning 2020. There are key areas where blockchain holds maximum
uses, they are,
Accounting: Blockchain
technology assists in automating asset and ledger record keeping duties.
Financial services: In the financial services industry, blockchain software is used for payment infrastructures, compliance and auditing, and credit scoring, to name a few.
Smart contracts: These are self executing contracts written and then coded. These are track-able, traceable and encrypted. They do not require a third party to frame the contract.
Storage management: Helps in the storing and saving of data in a decentralized network and uses storage spaces across the globe. This decentralized infrastructure acts as an alternative to cloud storage.
Security:
Blockchain software allows for transactions to be almost impossible to alter or
falsify, and are validated many times over.
Once a blockchain record is made, it cannot be
altered by anyone except by the authority that scrutinized the blockchain. The blockchain is maintained on the
bitcoin network, and is publicly shared with entities on that network, making
it a public account of transactions. Some of the real benefits that we can get
with blockchain are transparent and open transactions, accurate tracking and
permanent irrevocable ledgers. Alongside, this highly efficient tool will help
save millions of dollars that organizations otherwise spend on security and
infrastructure inputs for financial transactions. Since no actual money is
transported, there is no risk of theft.
Financial sector will be the prime sector that will increase the usage of blockchain. This is mainly because of the fact that the transactions will not need an intermediary like government agencies or central banks. From the graph by Statista it is evident that the blockchain technology is undoubtedly gaining its popularity with a projected substantial increase of 16.3 billion USD in just 5 years.
In the current world the most prominent reason for
the rising popularity of blockchain is decentralization. The technology came
into limelight in 2008, after the first transaction using bitcoin captured the
headlines.
Financial sector will be the prime sector that will increase the usage of blockchain. This is mainly because of the fact that the transactions will not need an intermediary like government agencies or central banks. From the graph by Statista it is evident that the blockchain technology is undoubtedly gaining its popularity with a projected substantial increase of 16.3 billion USD in just 5 years.
In
addition to decentralization and security there are some other added benefits
of blockchain.
With
blockchain technology, the transparency of the transactions increase since
multiple participants can view the database at a time. All transactions are immutability recorded,
and are time-and date-stamped. Just like browsing history in a work computer
every transaction will be available. Thus virtually eliminating possibilities
of fraud.
The
current day transactions are cumbersome. With many parties involved,
innumerable number of paperwork, human errors and mediation the transactions
are often inefficient. However with blockchain the paperwork can also be stored
efficiently and accessed when required. There’s no need to reconcile multiple
ledgers, so clearing and settlement can be much faster.
In
the new world people get bored doing repetitive tasks and large corporates are
trying to automate boring tasks. In blockchain technology the transactions can
be automated with smart contracts. Once pre-specified conditions are met, the
next step in transaction or process is automatically triggered. Smart contracts
reduce human intervention as well as reliance on third parties to verify that
terms of a contract have been met.
Examples
of how some industries will potentially benefit from blockchain,
- Blockchain benefits in supply chains and food chain
- Healthcare blockchain benefits
Healthcare is a service industry with one of the highest data breaches and data hunts. blockchain can help healthcare improve security for patient data and makes it easy to share and process data among the providers, payers and researchers. The data handling decisions can be collectively decided. Thus increasing the trust on the industry.
With these it is clear that the blockchain would definitely become an important method in which our finances and data gets shared and stored.