The internet has changed the way people send and receive data, voice as well as video, but a secure way to send assets has always been a major problem. Finally, a technology that solves this has arrived and it is known as Blockchain. Blockchain is a part of the FinTech revolution and it is disrupting the Finance Industry as we know it.
What is Blockchain?
Blockchain is a distributed database that maintains a continuously growing list of ordered records called blocks. It is used as a public ledger that records transactions between two parties in a safe and permanent way. Each block records a transaction and once it is completed the block becomes a part of the permanent database. Every block represents one transaction, hence once one block is completed, another one gets generated. Each block contains a timestamp and a link to the previous block. Because all blocks are in a chronological order just as banking transactions, the blockchain represents the entire transaction history. Resistant to any modification, once recorded, the data in a block cannot be altered.
The first blockchain was conceptualised by Satoshi Nakamoto in 2008 and in 2009 it was implemented as a core component of the digital currency Bitcoin. Bitcoin is a digital currency that is not backed by any central bank or government and is traded for goods or services with any vendor that accepts Bitcoin as a payment method. Blockchain has made Bitcoin be the first digital currency to solve the double spending problem, without the use of a trusted authority or a third party.
With Bitcoin, people can send money electronically as easily as sending a text. Using the internet, money is sent from one person to another without having to go to the bank. With Bitcoin, fees are significantly lower, it can be used in any country, the account cannot be frozen and there are no arbitrary limits. Bitcoins are kept in a digital wallet on a mobile device or a computer and transactions are overseen by miners who are rewarded with newly generated bitcoins for verifying transactions.
Cyber security is a big problem today. With Blockchain, however, sending assets is more secure than ever as Blockchain is secure by design. From its creation Blockchain has never been successfully hacked. It is impossible for anyone to fake a transfer as all transactions are recorded on thousands of computers and are completely transparent. Any tampering or an attempt of fraud is easily detected.
Blockchains are decentralised and distributed which means that no one owns the system, but all participants can use and help run it. This is really important as it means that it is impossible for someone to take down the network and corrupt it.
Embrace the Blockchain
The Blockchain technology is revolutionising the way we manage and save money, not only by making our everyday lives much easier but also much more secure. Its possibilities go far beyond just finance. If Blockchain can assure a secure transfer of currency, what stops it from being used in various other industries? One example beyond finance where Blockchain is being applied is the tracking of diamonds (www.everledger.io). With Blockchain other assets such as land titles, health records and much more can be managed. Get ready to welcome Blockchain into your daily lives very soon.
Manigo Team, February 2017