20:27 30 April 2018
Throughout history we have seen a plethora of ground breaking creations that can affect millions of people worldwide - cars, computers, mobile phones, and modern medicine, to name a few examples. Blockchain technology may not quite be at the same level as these epic inventions, but it is already making a huge impact, and is set to change the way that we approach and process online transactions.
Blockchain technology is a network that facilitates digital/online transactions. Information is passed through a decentralized peer to peer network using encryption which allows for greater levels of security and non-repudiation of data.
A user will instigate a transaction request which is broadcasted across the secure P2P network. This transaction is electronically verified and the user status is also confirmed. Once validation is complete, the transaction is added as a block of data to an existing chain and marked as complete – this all happens in a matter of seconds.
Traditional digital transactions are often hampered by slower technology and by the advent of a centralized control. This type of payment has to pass through a “middleman,” such as a payment gateway or a financial institution. This can yield many different benefits when it comes to the transaction itself. For example, according to BitFortune.net, by utilizing blockchain technology you can save from 50% to 100% on cloud computing costs, since the data is decentralized so there is no need to store it on specific servers.
In other words, the transactions are direct and facilitated through the P2P network. This means much faster transaction times. Blockchain technology also offers the following benefits:
Transactions can be confirmed without the need for a clearing authority
A blockchain ledger provides a persistent record that cannot be tampered with
A blockchain ledger also provides a greater degree of transparency
Due to encryption, blockchain technology provides a greater level of security
In general, blockchain transactions are processed instantly and are thus much quicker
As you can see, due to the nature of blockchain technology and how it’s transactions are processed, this type of transaction system is highly efficient in comparison to traditional transaction methods.
So how is blockchain technology currently used in society? One prominent example is concerning the internet, or the internet of things (i.e. the physical devices that make up the internet). Companies such as IBM and Mendix are using various blockchain technologies to improve the efficiency and security of the internet. IBM, for example, created one of the first blockchain networks in 2015 for ADEPT. Furthermore, IBM has created IBM IoT which uses blockchain technology to improve data filtration across networks. Various other startup companies are using blockchain technology concerning IoT, including IOTA, Filament and Moeco.io.
Blockchain technology is seeing an increase in usage in other areas of business including healthcare, insurance, supply chain management, cyber security, and even government functions. As this technology improves and more businesses realize its potential, we should see further implementation in the immediate future. Blockchain technology is here to stay!