Blockchain provides a secure online transaction, and it is used to record every transaction across many computers so that the transaction records cannot be retroactively altered without altering all the other subsequent blocks and compromise on the network. Every transaction on the blockchain is signed digitally with a public key cryptography; this makes altering very difficult because they are authenticated by miners with collective self-interest. Since blockchain database is continuously distributed, every transaction data must be propagated to all nodes so that the blockchain is synchronized as one ledger(Laurence, T 2017). It also aids in securing the transactions because each copy contains same version and no duplication.
A new block in the blockchain is created by a process referred to as, mining. Mining validates and adds a new transaction to the chain. Example, in Bitcoin which is a product of blockchain technology, a new block is mined in every 10 minutes. The rate of mining is different for different cryptocurrencies blockchain (Laurence, 2017). The miner, i.e., the machine used to mine the block, is rewarded financially, e.g., 25/block. Mining entails ‘proof of work, ’ i.e., miners in the network solve unique and difficult mathematical puzzle, the solution is included in the block header as “proof of work” for authenticity check of the block.
Blockchain technology goes mainstream, anyone who can access the internet can make transactions. This technology has a high potential to transform the business sector operating model with a lower cost solution (Reed, 2016). It can be integrated into different areas to meet different needs, e.g., to facilitate crowdsales, payment systems digital currency, etc. According to a survey conducted by the WEFGAC (World Economic Forums Global Council) shows that small and increasing proportion of global GDP is held in the blockchain. Banking and manufacturing companies such as Bank of Canada, IBM, UBS, Microsoft, PwC have opened research labs to experiment on how blockchain can be applied in the financial sector to increase efficiency and reduce cost.
References
Hayen, R. (2017). Blockchain & FinTech: A comprehensive blueprint to understanding blockchain & financial technology : 2-book bundle.
Laurence, T. (2017). Blockchain.
Reed, J. (2016). Blockchain.
I just read another video about this. I think this is a new technology that should be tested in small market first though. This technology is a pain release to preform more transparency economics. It is a tools that would increase the usability of e-coin like Bitcoin. However, the risk of using this is also obvious. If we rely on technology so much, what happen if they do not work anymore? What happen if the master server is hacked? Nowadays, hacking can do more than stealing privacy, hacking can appreciate of deprecate people monetary value in stocks, housing mortgages, Bitcoins.
ReplyDeleteI really think blockchain is going to be the next groundbreaking technology. It's going to have huge economic implications, like you stated about how much easier and efficient transactions will be. Having suppliers and distributors able to have this tech that automatically keeps track of transactions will be invaluable in the coming years. It'll also be interesting to see how this could pair with crypto currencies to move our world economy along even more.
ReplyDeleteThis topic was covered in some detail in October - check archives. No links provided... Glad you like this topic, it is definitely going to be groundbreaking. If we voted using blockchains, we wouldn't care that Russia tried to hack our voting booths (again) - because blockchains would not allow it.
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