“Blockchain” is the word that you have to hear at least once a day. It has attracted a lot of attention, with some people making it sound almost religious. Those who understand how it works are fascinated, those who don’t are skeptical, and the old dogs are simply scared. Even the movies began talking about blockchain disruptions. But what is it that makes this relatively new technology so disruptive?
How Does It Work?
First of all, it is important to understand how blockchain works so you can picture its advantages. In brief, the tech is based on cryptography. It’s origination was to support Bitcoin although its use has gone beyond the borders of cryptocurrencies.
Transactions are broadcasted across a P2P network and validated by miners. Miners approve the transaction as a block of data and encrypt it before adding the information to the blockchain. It uses a public ledger system which is immutable and almost impossible to hack.
What’s more, each transaction has to be signed by both parties and the identities don’t have to be made public. This system of carrying out transactions has the following advantages that give it the potential to transform many industries all over the world.
Mutual and Distributed
Blockchain technology is an open source type of network in the sense that no single person or corporation has the power to change records or influence the design. Even the miners are an open source community. Anybody can be a miner if they have the right processing power.
Blockchain can be used by anyone anywhere in the world for as long as they have an internet connection. It has the backing of many investors worldwide, with investments in the millions of dollars. Furthermore, giants such as JPMorgan Chase and Goldman Sachs have supported it by declaring blockchain to be the future of the banking technology.
Transactions on a blockchain network happen almost instantaneously and are transparent. This is partly because of the elimination of central clearing authorities which are notorious for taking their time and hiking the costs. Only the miners can validate a transaction and add it to the blockchain. That way, even if some of them went offline, the system would still run smoothly.
Software automates the operations. Every business aims to be as automated as possible so as to achieve operational efficiency that will increase the sales. Blockchain is, therefore, quite an ideal solution. The banks which adopt the technology could save up to 30% on infrastructure and another $160 million each year due to reduced headcount.
The Next Internet
Blockchain is where the internet was about 20 years ago. Most of its applications and use cases haven’t even been discovered, and some are still mere concepts. Looking at how far the internet has come in just two decades, it is easy to see that blockchain will be a major game changer in the years to come.
Perhaps the only challenge right now is that there is still a lack of awareness on the tech. Even those who have heard about it hardly know how it works and why it is creating so much buzz. However, this is changing rapidly as more and more companies incorporate blockchain technology into their model and businesses begin to accept cryptos.
The info graphic provides the concepts of blockchain, the industries that are being affected, and what the future of this revolutionary technology is going to look like.
Note: This press release is for an informational purpose only. Coinpedia is not responsible for the accuracy of the content provided in the article. Thereby, readers are advised to consider the company’s policy & T&C before making any investment.