Blockchain technology isn’t just an efficient way to settle securities. It will fundamentally change market structures, and even the architecture of the internet itself. Abigail Johnson
President and CEO of American investment firm Fidelity Investments (FMR) and a billionaire businesswoman.
Hi readers! another innovative technology is above the horizon for which we are not yet prepared. I am talking about
“The Blockchain”
Blockchain is a distributed database that maintains a continuously growing list of ordered records known as blocks. These blocks are linked through cryptography (a method of protecting information and communications by using codes, so that only those for whom the information is intended to, can read and process it like what you always see in WhatsApp messages (end to end encrypted). Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Blockchain is therefore, a digital database containing information such as records of financial transactions and is one of the most recent and important parts of technology Tsunami which is fast moving as is evidenced by new technological developments like HADAR, ( the topic of my next blog).
Blockchain is a digital ledger of transactions maintained by a network of computers in a way that makes it difficult to hack or alter. Since it is a shared, immutable ledger, it facilitates the process of recording transactions and tracking assets in a business network. [An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, and branding)]. One of the reasons for its immutability is that:
“nobody owns blockchain technology yet, everybody owns it thus, making it one of the unique features of this development. This collective ownership and accountability is what makes blockchains very secure and immutable.”
Blockchain Technology offers a secure way for individuals to deal directly with each other like “Cryptocurrency system” which is not controlled by the government or central regulatory authorities.
As a concept, cryptocurrency works outside of the banking system using different brands of coins: Bitcoin being the major player which is a digital currency whose transections are verified and recorded on blockchain from where it can be:
transferred from on digital wallet to another,
use to buy goods or services
trade in and
exchanged for cash.
The easiest way to do that is through debit card type transactions. These cards can be used to withdraw cash just like an ATM. cash withdrawal. Cryptocurrency can be converted into cash using banking accounts or peer-to-peer transactions.
Cryptocurrencies can be generated through a process called “mining” which is complex because it requires certain mathematical puzzles to solve over specially equipped computer systems which rewards the user with a bitcoin in exchange. Ideally, the process should take just 10 minutes to generate one bitcoin but in reality, it can take about 30 days.
According to a forecast by research firm Gartner, by 2026 the business value added by blockchain will increase to over $360 billion and by 2030, to more than $3.1 trillion. With current and future trends, blockchain is predicted to make a big revolution in the coming decades.
Blockchain has already shaken several industries through its unmatched data processing speed, accuracy and security. It is also known as one of the most demanded job skill. The impact of blockchain that sounds in and around industries is forcing big businesses to run around and acquire this tool and talent to keep up with the demand and remain competitive in the arena.
It is understood that the traditional route of success in an individual’s career or in business will no longer be applicable (infect it has already been obsolete or considered unfashionable). This means, that all the traditional paths to success, will no longer be applied to businesses or individuals. Factually, all name worthy decentralized marketplace platforms (an interface that i. brings together buyers and sellers of certain good or service and ii. enables them to transact without any central oversight that charges fees which is possible only due to blockchain technology and smart contracts).
Real estate business is one of the area which traditionally is done through property dealers who charges fee: do you know dear readers, what is the dilemma of real estate sector around the world and what are the anticipated measures to be taken to streamline it? Thought provoking, isn’t it?
This area and others like of this are making serious efforts to collect all the tools like blockchain, data analytics, AI-driven algorithms, and marketing that are available to any freelancer, entrepreneur, or even small businesses, and putting all of them on a more competitive field available with the major enterprises and established companies. This is imperative in order to avoid getting involved in tasks that are difficult or complicated to manage by individuals or competitive businesses which can be resource-draining if they have to be managed manually.
The Blockchain tools and their availability to everyone made individual workers and entrepreneurs surf the crest of the wave of this tsunami of technology to grow their own businesses.
Blockchain technology is extremely important for businesses runs on information. The faster, the accurate information is received, the better it would be. It is ideal for delivering that information because it provides immediate, shared and completely transparent information stored on an immutable ledger that can be accessed only by the member of a network having permission.
A blockchain network can track orders, payments, accounts, production and much more. And because members share a single view of the truth, it is possible to see all the details of a transaction end to end encrypted with greater confidence, as well as new efficiencies and opportunities.
Blockchain therefore is, such:
a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Anything of value can be tracked and traded on a blockchain network with reduced risks and costs for all involved.
Other benefits of blockchain includes:
Distributed ledger technology which means all network participants can have access to the distributed ledger and its immutable record which enable the transections to be recorded only once thereby eliminating duplicated efforts typical of a traditional business network,
Immutable records means no participant can change or tamper with a transaction after it is recorded to the shared ledger. If a transaction record includes an error, a new transaction must be added to reverse the error, and both transactions are then visible and can be inspected,
Smart contracts are a set of rules formulated to speed up transactions which are stored on the blockchain and executed automatically. Smart contracts can define conditions for corporate bond transfer including terms for travel insurance to be paid and much more.
The working of blockchain is simple yet complicated. For example, when a transaction is made, it is recorded as a block of data, (that may show movement of a tangible or intangible asset). The data block can record the information of choice i.e., who, what, when, where, how much and even the condition (such as the temperature of a food shipment). Each block in turn is connected to the ones before and after it and thus, forming a chain of data as an asset moves from place to place or ownership changes hand.
Just wait for the day, when all the assets hidden in foreign banks and offshore companies will be recorded and traded through blockchain. I wish it happened sooner than any later.
The blocks confirm the exact time and sequence of transactions, and the blocks link securely together to prevent any block from being altered or a block being inserted between two existing blocks.
(Please see below mentioned figure)
Figure 1. Blockchain technology is a distinctive amalgamation of cryptography and game theory. The former is the encryption and decryption of data, and the latter is study of strategic interaction of mathematical models among rational decision-makers. The image was published on May 25, 2022, on the internet by the Blockchain Council. One can see how the initial (blue) block created for one transection is linked with later transactions and the process goes on.
Transactions are blocked together in an irreversible chain: The blockchain, where each additional block strengthens the verification of the previous block and hence, the entire blockchain. This renders the blockchain tamper-evident, (which means any device or process that makes unauthorized access to the protected object, can easily be detected) thereby, delivering the key strength of immutability. This removes the possibility of tampering by a malicious actor and builds a ledger of transactions that every member of the network can trust.
In summary, it can be safely said that in old style of business,
lots of time and effort were waisted on duplicate record keeping and third-party validations,
Record-keeping systems can be vulnerable to fraud and cyberattacks,
Limited transparency can slow data verification, and
With the arrival of IoT (Internet of Thing), the volume of transactions have exploded.
All these factor can drain the bottom line like poor performing arrogant bosses who cover up their insecurities by faultfinding. I have personally seen this and experienced that these factor can drain the bottom line because these are typically disapproving and suggesting that a better way is needed.
Use blockchain and you are in business because:
Blythe Masters: British Private Equity executive says,
“Blockchain is the financial challenge of our time. It is going to change the way our financial world operates” while,
Frederick Ehrsam: an American investor, co-founder and managing partner of cryptocurrency investment firm “Paradigm” says,
“Everything will be tokenized and connected by a blockchain one day.”
Isn’t it time to think about and prepare for the future, dear readers?
Indeed, it is.
Take care,
Bye
