By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin blockchain, (Buy Bitcoin) the tech community has now found other potential uses for the technology.
In this guide, we are going to explain
to you what the blockchain technology is, and what its properties are what make
it so unique.
A blockchain is, in the simplest of
terms, a time-stamped series of immutable records of data that is managed by a
cluster of computers not owned by any single entity. Each of these blocks of
data (i.e. block) is secured and bound to each other using cryptographic
principles.
So, what is so special about it, and
why are we saying that it has industry-disrupting capabilities?
The blockchain network has no central
authority — it is the very definition of a democratized system. Since it is a
shared and immutable ledger, the information in it is open for anyone and
everyone to see. Hence, anything that is built on the blockchain is by its very
nature transparent and everyone involved is accountable for their actions.
A blockchain carries no transaction cost
- An infrastructure cost yes, but no
transaction cost.
The blockchain is a simple yet ingenious way
of passing information from A to B in a fully automated and safe manner. One
party to a transaction initiates the process by creating a block. This block is
verified by thousands, perhaps millions of computers distributed around the
net. The verified block is added to a chain, which is stored across the net,
creating not just a unique record, but a unique record with a unique history.
Falsifying a single record would mean falsifying the entire chain in millions
of instances. That is virtually impossible. Bitcoin uses this model for
monetary transactions, but it can be deployed in many other ways.
Think of a railway company. We buy
tickets on an app or the web. The credit card company takes a cut for
processing the transaction. Blockchains, not only can the railway operator save
on credit card processing fees, it can move the entire ticketing process to the
blockchain. The two parties in the transaction are the railway company and the
passenger. The ticket is a block, which will be added to a ticket blockchain.
Just as a monetary transaction on the blockchain is a unique, independently
verifiable, and unfalsifiable record (like Bitcoin), so can your ticket be.
Incidentally, the final ticket blockchain is also a record of all transactions
for, say, a certain train route, or even the entire train network, comprising
every ticket ever sold, every journey ever taken.
But the key here is this: it’s free.
Not only can the blockchain transfer and store money, but it can also replace
all processes and business models that rely on charging a small fee for a
transaction. Or any other transaction between two parties.
In
the financial world the applications are more obvious and the revolutionary
changes more imminent. Blockchains will change the way stock exchanges work,
loans are bundled, and insurances contracted. They will eliminate bank accounts
and practically all services offered by banks. Almost every financial institution
will go bankrupt or be forced to change fundamentally, once the advantages of a
safe ledger technology without transaction fees are widely understood and
implemented. After all, the financial system is built on taking a small cut of
your money for the privilege of facilitating a transaction. Bankers will become
mere advisers, not gatekeepers of money. Stockbrokers will no longer be able to
earn commissions and the buy/sell spread will disappear.
You can contact us or
directly send a mail to hello@codezeros.com for further inquiries regarding
Blockchain development and share your ideas with us. Let’s get together and
create a secure world together.
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