12 Jan Blockchain: AN EMERGING TREND SNAPSHOT BY INFOTECH CONSULTING SERVICES
What is it?
A blockchain is a data structure and coding breakthrough that makes it possible to create a digital ledger of transactions in a series linked like a chain, and share it among a distributed network of computers. Public key cryptography allows each user on the network to manipulate the ledger in a secure way without the need for a central authority. No single user can tamper with the records, which lends itself to blockchain’s greatest strength: It manages to keep everyone honest.
Why is this trend happening?
Blockchain was first defined in the original source code for Bitcoin, the digital currency. By 2013 many websites started accepting Bitcoins as currency legitimizing it as a genuine payment method. It was Bitcoin’s success as a means of payments free from VAT, on the Darkweb and amongst many mainstream users that brought attention to the technology powering Bitcoin. Even as trust in Bitcoin as a currency oscillates wildly, trust in blockchain the technology powering it has some of the biggest players in the Global economy from Banks to Governments very interested.
What are the benefits?
The Internet has disrupted many industries and will continue to upend others, transform entire economies and change forever the future of home, leisure and work. Some argue however that the Internet’s true potential is held back because it is hard rationalizing privacy and security with doing commercial and non-commercial transactions. People had been theorizing and working on solving this diligently since the early 1980’s. Blockchain now offers a solution to this problem. It allows trust to be decentralized. This lends itself to multiple use cases.
For example the ambitious Ethereum project is a decentralized platform that has the ability to auto-enforce and validate contracts and legal agreements. Blockchain can enable tamper proof databases for say land registries, ownership of artworks etc. In education it can provide a platform for scaling e-learning via assessments and testing integrity being automated and ensured. Imagine blockchain can be at the heard of educating the world and thus transforming it.
World’s top 20 banks control over 40 Trillion dollars of assets but their middle and back office functions are ponderous and inefficient. To mitigate risk multi layered complex processes involving many intermediaries, combine with manual check and tasks and third-party service providers. Assets that can trade in a nanosecond take days to settle. Blockchain-enabled distributed ledgers that de centralize trust will revolutionize and change this, saving banks billions every year. Imagine the trickle down impact on the world’s economy from such efficiencies.
What are the challenges?
Though privacy and security are hardwired into how block chain works and its public key encryption it will be key to keep investing into this arms race to make these protocols ever safer and more private. Hypothetical use cases like using blockchain for transactions among banks when actually implemented will require the ability to scale to immense proportions. Enabling that without compromising efficiencies will be a challenge. Bringing government on board via evangelizing and education requires blockchain to get its act together and form associations that can start pushing the relevant agendas.