Blockchain, the technology after the prominent bitcoin digital currency is a decentralized public ledger of transactions. It’s a technology that no company or person controls or owns. Instead, each user can access the whole blockchain. Each transfer of funds from one account to another account is recorded in a verifiable and secure form by utilizing algorithms borrowed from cryptography. With all copies of the blockchain distributed all over the world, it’s considered to be efficiently tamper-proof.
The challenges which bitcoin poses to international controls and law enforcement have been widely debated. But the blockchain ledger has usages far beyond average monetary transactions.
It Eliminates Transaction Fees
The blockchain is an open, worldwide infrastructure like the internet upon which other applications and technologies can be made. Like the internet, it enables people to bypass conventional intermediaries in their transactions with each other. Thus, it lowers or even eradicates transaction costs.
By utilizing blockchain, people can exchange money or buy insurance safely without a bank account. It can also be done even across national borders. It’s a feature which could be transformative for the two billion individuals on the planet who are underserved by financial organizations.
It Removes Intermediaries
Blockchain technology allows strangers to track simple, enforceable contracts without the help of an attorney. That makes it possible to sell tickets, stocks, real estate and any other forms of right or property without a broker.
The long-term impacts for professional intermediaries like brokers, attorneys and banks could be profound. However, not essentially in negative ways. That’s because such sectors pay huge amounts of transaction costs of doing business.
Blockchain transactions are recorded using private and public keys. These are long strings of characters, which are unreadable by people. Thus, people can prefer to remain anonymous while allowing third parties to confirm that they shook digitally on the agreement.
For instance, the hybrid blockchain of XinFin (XDC) connects public blockchain along with a private blockchain running in a complete permission environment. The technology leverages the power of both private and public blockchain paradigms.
But it doesn’t end there. An organization can utilize the blockchain to keep public records and binding promises. Experts at the University of Cambridge have revealed how drug corporations could be obliged to add detailed descriptions of their future clinical drug trials to the blockchain. It would prevent the firms from later stirring the goals when the trial didn’t pan out as expected.
Probably, the most encouraging merit of blockchain tech is the incentive it produces for participants to work fairly where rules apply similarly to all. Bitcoin did lead to some sought-after abuses in trading contraband. Further, some disreputable application of blockchain is inevitable.
The technology does not make theft impossible, only harder and more complicated. However, as an infrastructure which enhances the public record repository of the society, blockchain has the power to improve security, privacy and the conveyance of data. That ranks up there with liberty, life and the hunt for happiness.