The internet exists as a place where users can freely exchange information. Using the internet, we can move and store information as we wish. However, to exchange something of value such as money, data or documents, that exchange requires the use of a 3rd party such as a bank, payment processors, auditor, legal services or even notaries. Blockchain, the innovative technology which currently secures the use of the digital currency, bitcoin, will allow users to exchange transactions, in real time without the use of a third party. The problem with intermediaries in exchanges of value Banks and payment processors store our data and transactions on centralized servers that can be hacked, destroyed, or stolen.
Legal services, auditors, and notaries require time to authenticate the documents involved in various transactions. Blockchain offers better security for our online sales and the ability for those transactions to happen in real time. The use of blockchain technology allows the moving and storing of not only information but of documents, currency and valuable data without the risk of centralized servers being hacked. Secure exchanges can be completed immediately without wait times and authentication requirements.
What is blockchain?
The blockchain is a public ledger of secure transactions. It uses cryptography or digital locks on information so that these exchanges can be completed securely and privately. Large networks of computers around the world authorize the transactions and store the purchases permanently on a public chain. That public ledger is the blockchain. Essentially, users wanting to exchange documents, data, or money can do so in real time using the blockchain as a means of securing and publically recording the exchange. In the example of bitcoin, blockchain ensures that the same bitcoin cannot be spent twice by recording transactions. Through the blockchain, a transaction gets stored publically on a chain managed by this network of computers scattered around the world. This ensures that the data and information don’t get stored in one location leaving it a security risk. The other advantage to storing transactions in this manner is the live recording of transactions. Accuracy is inherent in the system. This eliminates wait times for processing transactions as separate records are reviewed by third parties to verify ownership of money and valuables for the exchange. In the example of documents, blockchain can serve as a “proof of existence” for records. A user can upload a document, such as a car title thus showing proof that the document exists and that they are the owner of the document at the time of the upload. That report then can be exchanged over a secure transaction through the blockchain. A buyer can exchange money for the title of a vehicle securely without the need for a title company or legal service to verify the title transfer, a service which takes time and money to complete.
Uses of Blockchain
Currently being used for the exchange of digital currency such as bitcoin, blockchain has future implications that will evolve the way we securely exchange valuable data in the future. Blockchain can remove the 3rd party necessary for the buying and selling of goods and services. This eliminates the requirement for transaction fees and wait times. Blockchain can be used to verify ownership of documents and exchange contracts and documents in real time. Blockchain opens up the exchange of goods, services, and electronic materials to millions of people around the world who don’t have the availability of 3rd parties such as banks and legal services. This will lead to economic growth and opportunity for millions of people who do not have access to business transactions in our current economy.
Future implications of the blockchain
The blockchain is currently being reviewed for its use in the trading and selling of company. Companies interested in developing stock exchanges using the blockchain want to take advantage of the immediacy of the transactions. Stocks can be exchanged using blockchain technology without the typical wait times required to verify asses and stock ownership. Blockchain can eliminate the expensive costs associated with the intermediary services used in the buying and selling of land and other property. Using this technology, documents and identification can be verified in real time. Contracts can be executed and money can be exchanged without the time and cost of verification services. Blockchain can facilitate agreements, processes, and tasks while storing these exchanges on a permanent public database protected from deletion and tampering. These advantages make blockchain worth exploring and allowing the technology to evolve.
Concerns with Blockchain
As a new technology, blockchain is not without skepticism. The blockchain is a young technology, and we have yet to see if and how hackers can disrupt it. Companies are looking to research ways to develop a stock market exchange using blockchain technology question the transparent nature of the blockchain public ledger. These companies are interested in research ways to make the trades on the public chain more private. Proponents of blockchain argue that cryptography or encryption and decryption will be the way transactions are kept private and secure. Blockchain will transform business and government while changing the way people around the world complete deals in the future. The transition to blockchain will take decades to adapt, evolve and become a regular part of the way our economy functions. The time it will take, will give businesses the opportunity to become accustomed to the new technology. Proponents of blockchain have concerns about the regulation or overregulation of this technology which would inhibit the technology from adapting and overcoming barriers to its use. While primarily used in the securing of digital currency exchanges at this time, blockchain has future uses far beyond the financial implications of the technology. The blockchain is a foundational technology which will slowly transform economies. Supporters of blockchain hope that the technology is allowed to evolve and grow without too much interruption from regulatory agencies. There are concerns for blockchain to be regulated as a financial tool rather than as a platform on which financial applications run. Blockchain carries more than just financial implications, and there is a need for it to be viewed as such. Not being over-regulated gives blockchain the chance to revolutionize the global economy.