We are in a world where we put our trust in other people’s hand, not minding the risk involved. Every day of our life, we rely on banks, governments, insurance brokers, remittance companies and other institutions to do transactions for us, with no choice but to trust the end-result, knowing that things may not be as they seem — mistakes are made, corruption, greed and deception may hinder us from the actual truth.
What if we interact with an entity whose integrity is guaranteed, eliminating if not completely, the need for trust.
The Blockchain is a revolutionary technology that may do to the financial system what the Internet did to the Media. People thought, the introduction of the internet will be a fad but had become a significant influence on our lives; people now prefer to read news online rather than from a newspaper. In this manner, we could soon be seeing a similar impact from blockchain where intermediaries like banks and other financial institution could be shown the exit door in our financial transactional dealings.
What is blockchain?
In 2008, the first successful implementation of blockchain technology was the result of a white paper published by an anonymous person called “Satoshi Nakamoto” that led to a cryptocurrency called “Bitcoin”. It described a decentralised peer-2-peer version of digital currency which enables online transfers to be wired instantly from one party to another without the involvement of any third party, i.e. a trustless payment system. The underlying framework for Bitcoin to carry-out such transaction is known as “blockchain.”
“Blockchain takes care of the business of trust, and establishes transparency”. The blockchain is a distributed ledger designed to facilitate transactions and keep track of assets in the form of records.
As a catalyst to Open up a world of financial potentials
Although the possibilities of this technology are yet to be fully utilised, but will soon speed up the world’s economic potentials. This article looks at five key areas where Blockchain could likely make a significant impact on the world economies.
The sharing economy
The so-called sharing companies like Uber and Airbnb require a credit card and cash payments to process deals, and always attract a plethora of transaction fees. In today’s business world, the blockchain is becoming the next-generation technology that can help facilitate the transactions that power the sharing economy. If someone wants to share a ride or rent a space, the blockchain could handle the payment and the transaction record — allowing cost savings and increased profitability for all parties.
Leveraging Blockchain to facilitate instant and secure payment
Modern businesses are tilting towards more efficient ways to manage transaction processing faster and securely. People tend to prefer real-time fund transfer and availability with little or no charges. It’s what one gets in using Blockchain technology to do the transaction. Shopping on “hodlandrekt.com” using Bitcoin eliminates unnecessary transaction fees, and the shopper gets his/her deals faster in a secure and transparent ecosystem.
Enabling citizens to own and monetise their data
Data is a powerful asset of the digital age. Today, organisations use blockchain technology to set up a functional system where data can be indeed owned, managed and monetised, while in control of your privacy and adequate protection of your identities.
Ending remittance rip-off
It is on record that, workers all over the world send almost a trillion dollars to their family members in native countries every year. This huge sum of money passes through intermediaries such as PayPal, Western Union Money Transfer etc., with transaction fees being imposed. Blockchain eliminates such intermediaries with little or no charges while the recipient receives such money in minutes, not days or weeks as the case may be.
Ensuring compensation for creators of value
The advent of the internet has promoted intellectual property infringement, and value creators no longer receive rewards for their efforts. The story is the same in the music industry, scientific discoveries, arts, inventions and book writing. Intermediaries such as record labels and streaming services take the lion share of the profits made in an album release. Releasing music in a blockchain ecosystem creates a built-in smart contract that protects the individual right of the artist. The song itself is a payment system, which implies that all the money get back the artist. The creators of value have control over the industry rather than the third party.
Even though predicting the future seems to be difficult, but the case of Blockchain is different. It’s certain; the blockchain will succeed where other existing institutions have failed or about to fail. Most financial institutions in recent times have adopted blockchain, having seen that, it is the technology of the future, to lower cost, increase security and enable data availability to its’ owners. Indeed, blockchain is the face of world-changing economy.