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Blockchain

What is Blockchain Technology?

Since the creation of cryptocurrency, the word ‘Blockchain’ has been used rather zealously. Many people cannot differentiate between cryptocurrency and Blockchain. In fact, most if not all people think that Blockchain is cryptocurrency. Is it? We’ll see in just a while. We will also look into how Blockchain technology works and what makes it a game changer. Let’s dig in.

What is Blockchain?

According to Wikipedia, Blockchain is ‘a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks’. That is quite a mouthful, isn’t it? Let’s break it down.

Blockchain is a public list of connected records or blocks that are linked together using cryptography (encryption). Each block has some information of the previous block. Thus, Blockchain data cannot be modified. It only allows information to be distributed and not copied.

With Blockchain, there is no transaction cost, it is safe and fully automated.

Where did it come from?

This ingenious technology came from an unknown person or people named Satoshi Nakamoto. This person/persons wrote the Bitcoin white paper, and thus deployed the first Blockchain. Therefore, to answer the question raised at the outset; Cryptocurrencies cannot exist without Blockchain. However, Blockchain can be used to do more than just create cryptocurrency. Thus, Blockchain is not cryptocurrency.

Blockchain Foundations

Blockchain is founded on three pillars:

i. Decentralization

With decentralization, information is not stored within a single or central entity. As a matter of fact, everyone owns the information.

ii. Transparency

With Blockchain and cryptocurrency in particular, transactions are made public. For instance, you can expect to see something like the following when you perform a bitcoin transaction.

A cryptocurrency transaction showing the blocks age and value of transactions
A cryptocurrency transaction

Thus, everyone can see each transaction as it happens.

iii. Immutability (Ability to stay the same)

Immutability means that once data has been entered into the Blockchain network, it cannot be altered. This property of Blockchain property can be used in financial and government institutions to drastically reduce corruption.

Blockchain Technology Applications

There are many applications for Blockchain. However, the following are some basic applications.

i. Stock Trading

When buying shares or stock from exchanges, you usually have to go through a process such as consulting with your stockbroker. With this technology, all the intermediaries are removed. This means a faster purchase and lower fees.

ii. File Storage

Much like the cloud, Blockchain will ensure your files are never lost. The files will be distributed across the network in bits. Thus, no one can access them without your prior permission.

iii. Internet of Things (IoT)

IoT is the network controlled automation of electronic devices. With Blockchain, there will be increased system efficiency and lowered costs.

Career Opportunities

Blockchain has certainly brought a tremendous shift in careers. Blockchain developers are needed now more than ever. So, if programming is right up your alley, consider Blockchain development.

Final Thoughts

In summary, we have seen that;

  • Blockchain was first instituted by a person or group called Satoshi Nakamoto.
  • Blockchain is Founded on three pillars; decentralization, transparency, and immutability.

This article has shed some light on the basic idea behind Blockchain and a few of its applications. With the growth in Blockchain, finance is the one sector that’s most likely to evolve. However, as this article shows, there are many other sectors where Blockchain is and will continue to influence. Whatever the case, one thing’s for sure, watch the Blockchain space!!

Categories
Blockchain

7 Awesome benefits of Blockchain in Finance

What comes to mind when you think of Blockchain, does Bitcoin pop up? Most of us only think of Bitcoin when Blockchain is mentioned. True, the success of Bitcoin is what put Blockchain on the map. However, numerous other sectors can apply Blockchain technology to their systems and processes. In this article, you are going to learn about the benefits that Blockchain in finance can bring.

Benefits of Blockchain in Finance

Increased efficiency

recent KPMG research shows that there is a 40 percent increase in efficiency due to the tamper-free property of Blockchain. Blockchain allows businesses to streamline their processes and remove complicated mechanisms that were previously necessary to ensure correct and accurate records.

Reduced fraud

Once you add something to Blockchain, you cannot erase it. This property of Blockchain ensures that when you do a financial transaction, no one can tamper with it. Security and Data accuracy improves while fraud reduces due to the immutable records available publicly.

Improved customer experience

Companies can use Blockchain to share information with clients and vendors. This lets customers get better services faster; and thus, more sales opportunities for companies.

Smart contracts

With Blockchain you are able to automate contracts to perform a wide variety of functions. How is this done? Several linked if/then statements that automate and implement contractual terms and clauses are inserted in a contract. If a clause is activated, Blockchain automatically processes it. Smart contracts reduce disputes in addition to saving time and resources. A few examples of this application include; payrolls, proxy voting, and trade clearing.

Security

Due to the use of advanced cryptography and fail-safes, security is the name of the game. You see, Blockchain is a series of blocks. These blocks are linked to each other. The blocks are connected to a big network of computers that communicates in real-time to ensure data integrity within the blocks. Users can add new data to the chain. However, they can’t tamper with or delete existing information. The same applies to transactions. Once done, they are recorded, verified, and finally validated. There is no alteration after validation.

Higher availability of capital

With Blockchain, you can expect less capital consumption. The reason – Blockchain is fast and efficient. With quicker payment processes and trade settlements, you will end up using fewer resources hence the availability of more capital.

Blockchain improves accounting (and accountants)

Blockchain brings with it a significant change to the industry. Adapting to its approach is a considerable boost to accountants and accounting as a whole. Imagine error-free accounting. Blockchain technology is a substantial boost to accountants and only makes them better and more efficient at their jobs.

Final Thoughts

While not many people have adopted Blockchain technology, it is here to stay. The existing authorities must start implementing Blockchain in their systems to get these benefits.

In this article, you have learned of a few ways that the finance sector can apply Blockchain

. Some of the most notable applications in Blockchain include;

  • Reduced fraud
  • More security
  • Smart contracts
  • Increased efficiency.

With the above points, you can clearly see the advantages and benefits that the finance sector can get by using Blockchain.