Type: Evaluation Essays
Sample donated: Loren Fox
Last updated: September 14, 2019
The blockchain is undoubtedly one of the most intriguing Inventions of this decade Originally developed as the accounting method for virtual currency Bitcoin, blockchains are appearing in a variety of commercial applications today. The blockchain is a decentralized, digitized public ledger of all cryptocurrency transactions.
Dynamic blocks that are continuously updated are recorded and added to it in chronological order, which eventually the market participants to keep track of digital transactions without any centralized record keeping. Each node of gets a copy of the particular blockchain, which gets downloaded automatically. A world economic forum report from September 2015 predicted that by 2025 ten percent of Global GDP would be stored in Blockchain! What is Block?A block is ‘current ‘ part of a Blockchain, which records all the recent transactions. Once completed, a block is stored as a permanent database. The process of generation of Blockchain is continuous, each time a block is completed, a new one is generated.
Thus a countless number of blocks are formed which are connected to each other in a chronological order. The Blockchain thus contains complete information about user balances, address right from the oldest to the most recently completed block. The data stored in Blockchain can’t be deleted under any circumstances. The Blockchain database is not stored in any single location which means that any centralized data doesn’t exist for a hacker to corrupt Blockchain’s durability Ian Khan, technology futurist puts the robustness of blockchain as, “As revolutionary as it sounds, Blockchain technology is truly a mechanism capable of bringing to everyone highest degree of accountability, There remains no scope of any human error, delays or even an exchange that was done without the consent of the parties. Most importantly Blockchain guarantees the validity of transaction by recording it not only in the main register but distributed system of registers, all of which are connected through a secure validation mechanism” India’s tryst with BlockchainThe Reserve Bank of India has successfully tested Blockchain technology for trade application, the evaluation was carried out in partnership with domestic banks.
The adoption of blockchain technology among stock exchanges and trade platforms is rapidly increasing. Banks in India have begun using Blockchain in their daily transactions but such instances are far and few in betweenGeneral potential Blockchain technology can be used to create a permanent and transparent ledger system for compiling data for sales. In 2017 IBM partnered with ASCAP and PRS to adopt technology in Music distributionBanksRussia has already started implementation of blockchains in it’s nationalized banks. The state-run Sberbank announced last December that it is going to implement document transfer and storage via Blockchain CryptocurrencyMajor application of Blockchains include cryptocurrency like Bitcoin and ether, the Blockchain of other cryptocurrencies have been termed as altchainsHow secure is blockchain?The blockchain is undoubtedly the most secure technology today.Every transaction is tied to previous transactions which are viewable to all participants of a Blockchain distributed ledger. Any attempt to alter the data would require the hacker to change all the previous transactions of the Blockchain which is almost impossible. Moreover, all the Blockchain transactions are validated by algorithm on nodes. Advantages of Blockchain technologyDistributed ledger technology makes it enormously easy for business and banks to streamline their internal operations, which dramatically reduces the expense and delays caused by the traditional reconciliation methods.
Widespread adoption of Blockchain technology will bring enormous savings in the following areas• The employee headcount can be greatly reduced as DLT is much cheaper to maintain than any other accounting system• It shall minimize the processing delay which shall eventually reduce capital held against pending transactionsBlockchain’s remove almost all human evolvement in processing which is quite beneficial in cross-border trades TransparencyThe Blockchain technology is almost an open source, that means the users have options to modify it as they deem fit. But what’s most notable about being open is that it makes altering with logged data almost impossibleFaster transaction settlements with reduced costsBlockchain technology works 24 hours a day seven days a week whereas traditional banks are open only during normal business hours, five days a week. Moreover, Blockchain technology entirely eliminates the role of middlemen which means that they can actually reduce cost to the userDecentralisationInstead of running a massive data hub and using it for verifying transactions through it, Blockchain technology allows individual transactions to have their own proof of validity and authorization to enforce these constraints. With information on a particular piecemealed throughout the world on numerous individual servers, it is ensured that the entire information never falls into hands of any hackers, thus eliminating any possibility of hacking. Disadvantages Redundancy: Whereas centralized databases process transactions once or twice, in a Blockchain, they must be processed independently by every node in the network , so there’s a lots more work being done for the same result. Integration concerns: Blockchain application offers solutions that require significant changes to or complete replacement of existing systems.Uncertain regulatory status: Blockchain face a hurdle in widespread adoption by pre-existing financial institutions if it’s government remains unsettled