Blockchain: Groundbreaking Technology at Your Service2018-02-28T12:27:56.000Z 2018-02-28T12:27:56.000Z Blockchain is a new technology of data storage and distribution which is capable to replace the traditional way of processing huge volumes of data.
Blockchain is a new technology of data storage and distribution which is capable to replace traditional way of saving huge volumes of data, to make information storage processes easier and cheaper and to transform IT industry in a manner that will, definitely, surprise many of us.
The role of blockchain in changing IT may be as significant and influential as Google’s contribution to information search browsing and Facebook’s impact on online communication technologies. In a nutshell, blockchain’s value can be even greater as it resolves one of the most crucial issues of today’s IT: how to keep huge amounts of data safer and to handle them in an easier way.
The massive hysteria around blockchain can be justified with its advantages and potential that appeared on the market since this new tech has become available. Basically, blockchain is a new principle of data distribution, thus, these days many IT companies and start-ups are searching the ideas how to implement it into their products in order to make information sharing quicker and better protected. As of now, plenty of projects are known which are attempting to adopt blockchain in various sectors from mobiles apps to public services.
The experts in IT field claim that blockchain is able to establish totally new platforms for economic and social progress being something much bigger than a simple data-sharing technology. Similarly, considering blockchain such a fundamental innovation, they also believe that it will be absorbed by the industries and technologies gradually and stable, so in some time it will become an integral part of the digital field.
What is the essence of blockchain?
In fact, blockchain is an electronic ledger, data storage and transfer technology with public access that can be distributed among many separate users and it establishes an unlimited range of transfers, each next of which is connected to the previous. Each part of data is named a “block”, so unlimited or determined group of users can access the register. Each part relates to separate user. In other words, blockchain technology is basically a shared database filled with input data that have to be approved and encrypted. The simple analogy to understand what blockchain means is to recall shared Google Docs which contain information entered into the sheet and each piece of data is related to the other entries in logical order.
The updates can be inputted into blockchain only with the approval of all members of the group and after new data is introduced, it can never be deleted. Moreover, blocking tracks and keeps the records of every inputted update.
Still, despite its advantages, blockchain is new technology, so IT experts don’t rule out the possibility that users may face some serious troubles when using it. Indeed, the platforms, utilizing blockchain, are unifying their software in order to avoid such kind of things, however still plenty of companies, which own different blockchain software, exist.
But how did it happen that blockchain has become so famous in a moment? The most probable cause is the fact the blockchain technology was utilized by Bitcoin, a cryptocurrency, in fact being a world-known online payment transaction system that is functioning based on the public network. This is the first system of this sort that has become distributed and decentralized based on blockchain principle. The objective of Bitcoin founders was to allow virtual money transfer directly online from one person to another avoiding financial intermediary. Bitcoin appeared as a sensation but after exploring its nature the experts and IT business leaders have discovered something more universal, progressive and solid in the basis of Bitcoin’s success, which, indeed, is a blockchain.
How does blockchain work in practice?
Being an equally managed network based on a divided server with time-marking ability, the databases in blockchain can be used separately for data sharing between individual users. Actually, blockchain system doesn’t require centralized control as system management is carried out by its users. So, blockchain can be characterized a totally decentralized system in which all components are interconnected.
One of the really prominent advantages of utilizing blockchain is an option of self-executing contracts, so-called “smart contracts”. Actually, this is an agreement between buyer and seller which is designed in the lines of code. The agreements, contained by code, exist in the blockchain distributed decentralized network. Thus, “smart contracts” allow carry out the agreements between the parties who are anonymous and unfamiliar to each other, so they don’t need an intermediate party who will issue guarantees of the agreement and still, the agreement will be effective and secured. “Smart contracts” technology delivers completely new notion of trust in business, so there is a powerful potential to be applied in overseas trade, e-commerce and another sector that require the authorization of cooperation between two or more parties.
Is blockchain totally safe?
Although everything that is created by one human can be hacked by another human, the experts consider blockchain as the safest system these days. The thing is, blockchain systems are built in a way that all transactions that are transferred through it have to be verified by multiple members of the network. Furthermore, it is impossible to hack blockchain system by invading only one server, because in order to make successful hack it would be required to intrude all servers in the network that sounds really infeasible.
In a nutshell, the fact that blockchain consists of numerous servers are its huge advantage as data storage and transmission capabilities of blockchain is much bigger than of other IT market leaders such as Google and other giants.
The blockchain can be of different modifications but two main types are public and private systems. In the public blockchain, any user is able to track the transactions if being a member of agreement process. There are also corporative blockchains that include several companies, for example, banks, which are the equal components in the approval procedure.
In the private blockchains, the accessing ability is more limited and the access is granted to the narrow circle of users or organizations, agreed to create closed network community.
Therewith, being a self-regulative system blockchain allows avoiding conglomeration of stored information about transactions when more than two parties are involved in the process.
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Where blockchain can be applied and why?
Basically, blockchain is a sort of technologies that can make almost every industry more efficient and beneficial.This time a list of few most perspective fields where blockchain can spread with a light speed is listed below.
Banking and Financial Services
Indeed, the first sector which comes to mind when thinking about blockchain is finances, banking, and payment systems. Some experts believe that blockchain can impact finances with the same level of transformation as internet influenced media. And this comparison sounds fair.
First of all, blockchain can ensure the access to the financial services for all people across the world even in the most remotely distanced areas. As well, it allows making banking services faster and more convenient. As an example, Barclays is already working on the adoption of blockchain technology in their banking group in order to make its functioning more flexible and reactive.
At the same time, IBM expects that until the end of 2017 more than 15% of the banks in the world will utilize blockchain technology. Moreover, the unprecedented data encryption level ensures highest safety standards for the financial operations of any sort. Proven by Bitcoin, the experts believe such start-ups will continue emerging on the market enhanced by blockchain’s security and performance potential.
Obviously, possessing totally new encryption system the blockchain is seductive in terms of its safety. Both young start-ups and experienced IT companies understand that specific authorization process makes blockchain almost invulnerable. Indeed, blockchain itself is a bit crude technology and there may be some weak spots that are proven by few recent hacking attempts but further development is expected to eliminate these weaknesses. Meanwhile, being inspired with boundless horizons of blockchain cybersecurity capabilities plenty of internet start-ups such as Guardtime, REMME, Obsidian have already put blockchain tech on the basis of their business model.
Logistics and trade
The ability to store huge amount of confidential data independently on numerous servers, to transfer it quickly and safely, means that there is huge potential for blockchain if adopted in logistics and trade operations. As, for example, overseas shipments require exchange of shipping documents which, actually, are the basis of trust between parties, the availability of self-verifying system such as blockchain will help to eliminate vast volume of paper documents to be transferred in order to handle supplying procedures and to fix the relations between the seller and buyer in a digital way. So, it can be expected that blockchain will be applied by the transportation companies as well as public authorities which are involved in trading operations regulation.
Digital transformation in the healthcare system being represented by the active use of electronic wearables by the patients has lead to patient data increase. Indeed, it allowed doctors managing more patient medical information to carry out more accurate and progressive diagnostics, disease risk profile preparation and treatment model development as well as to make customer approach more individualized and connective. On the other hand, the necessity to store vast volumes of confidential data has arisen and the blockchain can be an outstanding solution for its processing and securing performance provides healthcare operators with more capabilities than ever.
The Internet of Things and network communications
The ledger structure of the blockchain makes using plenty of digital devices more convenient as in order to get and install updates or synchronize information now there is no need to connect all of them through the centralized server that is replaced by numerous independent servers and computers. Since blockchain has become available the devices can communicate with each other independently which is both more comfortable and safe. IBM and Google are rushing in this field to be the first companies which recognized the benefits of personal digitization development combining hi-tech with blockchain platforms.
Indeed, the use of blockchain is not restricted with these few areas and it can be successfully applied in mobile payments, business analysis, and forecasting, public transportation, cloud data storage technologies, public services, energy, retail, real estate, basically, in every sector you can imagine. In fact, the universal applicability of blockchain can make it one of the most disruptive IT innovations ever created.
Yet, blockchain is in its early stage of development as the experts believe that it is in a similar stage as the Internet was 20 years ago. Only 0.5% of world population is using blockchain these days. Nevertheless, IT giants such as IBM, Microsoft and actively invest in blockchain and as of today the total investment portfolio into blockchain projects across the world amounts to nearly US& 1 billion. In turn, until 2024 the world blockchain market is expected to grow up to US& 20 billion. Thus, it is clear blockchain technology has a bright future in terms of financial outputs as well as innovations progress impacting human lives quality.