According to the definition, Blockchain is a distributed database; that maintains a continuously growing list of records, called blocks. Every block contains a timestamp and also a link to a previous block. More technically speaking, it is a digital ledger; where the transactions made in crypto-currency(or bitcoin), are recorded chronologically and publicly. Interestingly, last year an Indian multi-national bank; ICICI bank announced that it has successfully used the blockchain technology; to execute transactions in International Trade and Finance, in the partnership of Emirates NBD; a Dubai-based bank.
Invention of Bitcoin and Blockchain Technology
A cryptographer with the pseudonym Satoshi Nakamoto; created a crypto-currency called bitcoin, in 2008. The digital currency Bitcoin allows you to perform one to one transaction easily; without the help of third parties like banks. Blockchain technology uses this data structure to simplify the process of the transaction.
However, the revolution of Blockchain has its base in another technical revolution; the invention of the database, by IBM in 1970. Given its importance in our everyday lives now; it won’t be an overstatement to say that almost every aspect of civilization depends on this invention for storing and retrieving data today. Now, the Blockchain system is going to revolutionalize the databases; and this will in turn again revolutionalize each aspect of the present civilization.
Blockchain Technology – No More Middlemen
According to a report by Harvard Business Review, the Blockchain technology will help to create a world without middlemen. Looking further into this concept, it is noticeable that the database model by IBM remained a steady one until the Blockchain was developed. Blockchain’s concept proposed an idea that states – ‘What if your database works like a network that is shared by everyone in the world; and where anything and anyone can connect to it?’ Blockchain technology experts call this system – ‘Decentralization.’
For example, a bank’s ledger connects to a centralized network. While the blockchain system is anonymous; thus giving protection to the identities of users. Hence, this system makes Blockchain more secure in carrying out transactions. The technology for recordingvarious transactions uses an algorithm; which reduces the dependence on people for verification of transactions. Thus if the world starts operating without middlemen, efficiency will increase majorly. Given these points, Blockchain technology has immense potential of disrupting the financial system.
Usages of Blockchain Technology
Notably, the usage of this technology is not only limited to the banking and financial sector. It is helpful for professions and industries like; Healthcare, Government, Manufacturing, Media and Entertainment, Retail, Legal, Supply Chain and Logistics and Insurance; covering almost all segments of the market.
Another example is of the Honduras government. It has held up all land records on a public ledger; which is the Blockchain. Hence, even a change in the ownership will get recorded at that very minute.
Call it a major benefit or a USP (Unique Selling Point), Blockchain helps two parties in executing and verifying transactions; without any kind of an intermediary or human interventions. On the other hand, the electronic ledger of transactions is maintained and verified in the ‘blocks’ of records continuously.
If experts are to be believed; the Blockchain system will help in bringing down costs and removing middlemen; along with reducing inefficiencies significantly in many sectors of the market.