Cryptocurrency has been a hot topic for banking and other financial institutions over the past few years. Many of these institutions are merging with blockchain technology industry for their transaction process. These cryptocurrencies can be defined as a digital token which can be used to make transactions more secure and private. Cryptocurrency employs blockchain technology which itself is a decentralized, distributed and public ledger.
The term itself is not so complicated as it may sound. The word “block” can is a piece of digital information and “chain” can be regarded as a database that is used to store this piece of digital information(block).
Some Insight In Blockchain Technology
As said above, blockchain contains two words “block” which is a digital token and database “chain” to store that token. “Block” itself has three types of information in it.
1 Firstly, the block contains the information about transaction like the amount, time and date of your recent purchase.
2 Next, it contains the details about the participants of the transactions like name of participant and company for which transaction was done. In terms of blockchain, your actual name is assigned a unique digital signature to maintain the privacy of the user.
3 Finally, the block contains the information which differentiates it from other blocks. This information is called “hash” which is a code assigned to each block. Every block in a blockchain will contain a unique code.
How Blockchain Technology Industry Will Affect Other Industries
Blockchain is a digital technology using cryptography and timestamps to create immutable and permanent records. Thousands of computers worldwide hold these records simultaneously maintaining the integrity of information within them. Blockchain technology industry opens the way which allows users for a pee-to-peer transaction without any central intermediaries with its crypto services. With the advent of the most popular cryptocurrency, Bitcoin, financial sectors became the first one to adopt the blockchain technology industry. Blockchain is giving advantage to these industries in many areas like finance, project finance, crowdfunding of digital currency, debt, derivatives, microfinance, remittance, equity.
Beyond this, industries such as real estate, energy and healthcare are using the blockchain technology to maintain information about property rights, patient records, supply chains, audits, contracts, workflows, workforce and logistics. While challenges loom and its commercial value remains unclear, the adoption of blockchain technology is heavily dependent on continuous research and experimentation in various areas like the evolution of business models to harness its potential and demonstrated user cases. For example, IHS Markit, a pioneer in providing critical information, has offered an integrated analysis of blockchain and report in giving insights on industries it will likely to interrupt.
Benefits Of Adopting Blockchain Technology
1 Confidence- To foster trust among partners to a transaction
2 Transparency- Anyone in the network has access to information which can provide easy audit.
3 Security- Since records in the blockchain are immutable, it prevents the risk of fraud.
4 Efficiency- As the main goal of blockchain technology is the removal of central intermediaries cuts expenses and reduces time.
Although many industries have adopted it, the blockchain technology industry still faces a lot of problems.
1 Complexity- Blockchain appears to be complicated as it requires cryptographic key management.
2 Overvaluation- Cryptocurrency demands some of the market corrections.
3 Scalability- As this technology is growing very fast, it demands more computational requirements.
4 Sensitivity: There are still doubts regarding the privacy or sensitivity of the information.
Although the blockchain technology industry is still new in the world of technology, it has gained massive popularity with its very first use of cryptocurrencies. Many of the sectors like eCommerce, healthcare have found it helpful for their services. Still, these industries are doing blockchain analysis in so that they are non-hesitant in adopting blockchain technology. More and more applications are developed and put into the test each day. Once technology is adopted ultimately, it will bring a new revolution in our way of living.