The bright future of blockchain and its impact on technology
Despite the fact that some irregular movements, on websites where cryptocurrency is traded, have put a question mark on this market, the perception regarding the security of blockchain technology has not been affected.
And the fact is that it refers not only to electronic currencies but to other fields of application. In this article, we will learn a little more about this topic and we will try to answer questions about whether there is a bright future for blockchain and what impact it will have on the technology of the coming times.
What is blockchain?
In 1991, the first work on blockchains had been done. And in 1998, Wei Dai described what a decentralized solution for electronic payments would look like, using public-key cryptography.
Usually, this technology is related to the project Bitcoin, whose birth dates back to the year 2008. However, it is on January 3, 2009, when it really comes into operation.
In a simple way, IBM defines blockchain as a shared and unalterable ledger, which facilitates the registration and tracking of transactions in a business network, whether it is a tangible or intangible asset.
How it works and what are its advantages?
The main elements of a blockchain are:
- Distributed ledger: it can be accessed by network participants.
- Unalterable record: transactions are recorded only once in the shared ledger and, when they are already recorded, no one can modify them.
- Smart contract: refers to the set of rules stored in the blockchain, which are executed automatically.
So, the movement of the asset is recorded in the chain, where the actions within the process can be seen: who, when, what, where, how… Each block is connected to the previous one and the next one (that’s why it’s a chain.) And it doesn’t allow insertions in the middle, nor be reversed or manipulated.
Thanks to this, the process can be traced, since all the data is visible, from the beginning to the last transaction. This generates greater trust, reducing risks and costs for those involved, and providing information quickly and accurately.
Even better, the operations can be carried out in a way that is completely transparent, because the data is stored in an unalterable ledger, which can only be accessed by authorized people, who share a single source of information.
Summarizing in a few words the benefits of blockchain, they aim to generate transparency and trust, as well as security, reducing the risk of fraud, maintaining confidentiality and even preventing cyber-attacks; in addition, streamlines the flow of information, receiving accurate data, which helps to save time and costs of administration.
Fields of application
Blockchain is not just cryptocurrencies. The model also allows running applications in distributed mode, which do not depend on a server or entity, as contracts in a decentralized way.
Currently, many organizations implement this technology in a variety of processes, both in industries and in financial operations, facilitating payments and even shipments. Therefore, in the United Kingdom, it has been implemented in logistics for supply chains, improving the monitoring of production.
Other possible and current blockchain applications are as follows:
- Information storage: with blockchain it is possible to generate decentralized nodes in different locations, capable of withstanding the failure of any server, reducing the possibility of losing data.
- Digital identity theft is one of the biggest challenges of cybersecurity today; but it can be reduced by blockchains, by providing a secure and unalterable system; something that undoubtedly would help to avoid problems with the bank account and even with the email.
- Security: monitoring mechanisms, it can prevent system failures, and stay in perfect operation, even if there is a server crash.
- Votes: for ensuring the transparency of electoral processes, and guaranteeing the reliability of electronic voting; in fact, in the American state of West Virginia is already being implemented.
- There are already wine cellars that use this technology to certify the denomination of origin.
- Regarding uses in the financial sector, they can provide a funding mechanism, for example, by offering virtual tokens instead of shares.
- They also constitute an alternative to generate and guarantee payments in international transactions.
- Visa, the credit giant, is incorporating blockchain for different uses, for example, biometrics to validate the identity of people.
- Thanks to blockchain, Walmart was able to provide data to the FDA in investigations of contamination and food safety risks.
- Technology companies foresee its application to prevent counterfeit products (software).
- In education, the possibilities of blockchain are being explored, as a mechanism to ensure the authenticity of academic certifications.
Impact of blockchain on the technology of the future
Although some irregular situations were mentioned at the beginning, it is appropriate to clarify that the problems with websites where cryptocurrencies are traded had nothing to do with blockchain technology. It should be emphasized that it is completely safe.
Currently, the finance sector is where the most use of blockchains is made, representing 60% of the global market, since it always requires great security, speed and transparency in operations.
However, it is estimated that this technology can go much further. According to an article published on the PWC portal, by 2030 it is expected to represent a $3 trillion annual market, and between 10% and 20% of the operation of the global economy will be done on blockchain-based systems.So there is no doubt that, beyond bitcoin, there’s a bright future for blockchain, with a great impact on the technology of the times to come.