Nowadays, most people trade through trusted intermediaries (such as banks), but blockchain allows consumers to directly contact suppliers without going through any third party. The blockchain uses encryption technology to secure transaction activity, and provides a decentralized transaction database that is open to everyone on the network. Essentially, the network is a series of computers and must be verified and recorded before it can be approved for making transaction.
Blockchain is a comprehensive discipline, which involves distributed computing, theoretical computer science, formal methods, programming languages, databases, cryptography and protection.
- A wants to transfer money to B.
- The transaction is now shown as a “block” online.
- The “block” will be distributed to every member of the network.
- Each member of the network approves the transaction as valid.
- The “block” can be added to the chain to provide ineradicable and transparent transaction records.
- Money is transferred from A to B.
The technology is applicable to almost all transactions involving value, including currency, goods and assets, and it has almost unlimited potential adoption, whether it is tax collection or immigrant remittances to countries where it is difficult to use bank transfers. Blockchain can also help reduce fraud, because every transaction is recorded and posted to a public ledger to be announced globally.
According to the World Economic Forum’s “Global Agenda Councils” survey, blockchain currently accounts for only a very small percentage of global GDP, about 0.025%, but it will increase significantly in the coming decades. In addition, several companies are racing to adopt blockchain, especially UBS, Microsoft, IBM, PricewaterhouseCoopers, and Bank of Canada are also experimenting with this technology. A report by financial technology consultant Aite estimates that last year banks spent $ 75 million on blockchain projects, and Silicon Valley venture capitalists are still awaiting.
- Ensure that neither party can control the cryptocurrency and blockchain.
- Remove middleman from the equation and traditional trading system no longer needed.
- Blockchain transactions are conducted 24 hours a day, 7 days a week.
- Buy and sell intellectual property safely and secured.
- Fully abide the contract.
- Publish important medical information.
- Ensure that there is no corruption in election voting.
Blockchain technology is an innovative tool, and can be potentially applied in the public, and can be safely traded without central authority. Since 2009, with the application of blockchain technology under Bitcoin, there are more and more based solution created with blockchain technology basis. Blockchain technology is still in its early stages, but it is based on the principle of broad acceptance and sound encryption. Recently, the technology has taken further steps and has been widely publicized.
Text: Dr. Gunasekar Thangarasu
Translation: Jimmy Chong