Some of you would have by now heard of the term “blockchain” . Still a relatively difficult term to decipher, blockchain is growing in popularity with each passing day. So what exactly is blockchain? In layman’s term, blockchain can be referred to as a digital ledger in which records of all transactions that are made through cryptocurrencies such as bitcoins can be maintained. As cryptocurrencies are gaining in popularity, blockchain is also increasingly being used across the world. As of today, blockchain remains the most effective digital ledger system.
Blockchain: A Historical Perspective
Although blockchain was first described theoretically back in 1991, it was conceptualised in the year 2008 and implemented the following year, as a core component of bitcoins. Historically, cryptocurrencies always suffered from the double spending problem ( an inherent flaw wherein the same digital token gets spent more than once). Before blockchain, all digital currencies required a trusted administrator to eliminate double spending. Now with the advent of blockchain, a trusted administrator is no longer a necessity.
Let’s have a look at the specific attributes of blockchain and how they prove beneficial to people transacting through cryptocurrencies.
- Perhaps one of biggest advantages of blockchain is it’s public nature. Basically a peer to peer network, all transactions taking place through cryptocurrencies such a bitcoin can be checked and if needed, validated by anyone
- The transparency offered by blockchain makes it ideal for high value transactions, transactions between two entities that are in different parts of the world etc.
- It’s perhaps the most inexpensive way to transfer value, coupled with the fact that blockchain can be accessed by anyone anywhere using only an internet connection makes it very effective
- Blockchain reduces the complexities that are generally involved in transactions using digital currency systems. It majorly simplifies processes such as analysing, cross referencing and also communication between various systems, contracts, intermediaries etc.
Blockchain Trends & Predictions for future
Already, global behemoths such ad Deutsche Bank, IBM, Microsoft are analysing and investing in blockchain. Likewise, many governments and organisations have put their money on blockchain. To elaborate,
- The global blockchain market is expected to increase significantly over the course of next few years and is expected to be worth 20 billion U.S $ by 2024
- 90 percent of North America and Europe based banks are exploring solutions pertaining to blockchain
- Another interesting fact to note is that in the last 5 years, venture capitalists across the world have invested in excess of 1 billion U.S $ in it
- The U.S federal reserve, with the help of IBM is currently developing a digital cash system using blockchain
- Some analysts have even gone to the extent of saying that blockchain today is exactly what the internet was 20 years ago