Blockchain, a remarkable invention in the circle of modern technology, is the product of Satoshi Nakamoto. Since its invention in 2008, it is continuously changing the financial system of the global world.
In this article, I will try to guide you about blockchain technology and how it is modifying the financial and other institutions.
What is Blockchain Technology?
In simple terms, blockchain is not controlled or managed by one authority or institution; it is a decentralized network and has access to everyone involved in the process. Satoshi Nakamoto devised it for bitcoin, a digital currency used on the internet.
The main purpose behinds it is that data or information will not be controlled by an institution or any other entity rather it will process automatically as a decentralized network. The data is stored in the form of blocks and all the blocks are connected making a chain. These blocks will be stored publicly and everyone can reach these blocks. It is impossible to hack data from these blocks as they are connected in series by a code that is linked to the previous block as well as the next one.
This feature of blockchain makes it very popularize globally and as a result, many institutions are seeking to adopt this technology to fit in their working systems.
Role of Blockchain in Cryptocurrency
This technology was devised to store all the records of Bitcoin’s transactions. When a certain amount of transactions is completed then a block is automatically created and it will publish on all the systems of bitcoin miners. It is impossible to attack the blocks to steal bitcoins because this data is transcribed on the public ledger and the transaction is approved by all bitcoin miners.
With time, new coins came into the market based on the blockchain technology. Exchanges based on this technology came into the market to convert fiat currencies to cryptocurrencies and crypto-to-crypto, digital assets.
Is blockchain replacing the Traditional banking Systems?
There are a lot of drawbacks in the traditional banking system that can be covered by this new technology.
When you send money through banks, they charge you a handsome amount of money in the form of fees for the service. Everyone wants to send money without paying taxes on the transactions. This problem can be reduced by the blockchain technology as there is no third party involved and there will be no fees on the transactions.
Wastage of Time
As you know very well, sending and receiving money takes a lot of time and 2 holidays after 5 consecutive working days delays you even more. Sometimes, it creates big problems for people. Businessmen are more affected by this deletion of time in transactions as they need urgent money to make deals or agreements.
These mentioned issues can be solved by using the blockchain system as it is very quick and fast, solving problems in minutes and seconds. It takes seconds to create a lot of transactions at the same time through this technology.
In the traditional financial system, the third party is involved in the form of banks and credit or debit cards (Master, Visa). When people transfer their money in the banks, the banks used this money in other sectors as a part of an investment and make a pile of wealth using customer’s funds.
Sometimes the funds are stolen such as hacker attacks or theft attacks. In the past, visa cards are badly affected by hackers and lost a lot of funds. These unnatural practices are always caused disturbance because of third party involvements that are based on a centralized system.
These immoral activities can only be removed by making the banking system decentralized and blockchain technology is based on the same decentralized system.
Blockchain and Real Estate
As this decentralized technology is expanding day by day, it catches the attention of many real estate firms throughout the world. You are already familiar with the real estate and must have experience of buying and selling the property or a house.
The whole process of property exchange can take a lot of time and nearly consume several months in underdeveloped countries.
There are a lot of researches are in the process on how to convert the traditional system of real estate onto blockchain ledger. This will remove the risks of fraud because all the documents and data about contracts will be pasted on the public ledger and no one can change or alter this public ledger.
Additionally, it will also lower the fees and taxes on the contracts. Adding one more, the smart contracts will alleviate the time frame to make contracts or agreements of real estate.
Head of Savills World Research, Yolande Barnes, said that:
Real estate is the pre-eminent asset class which will be most impacted by global monetary conditions and investment activity and which, in turn, has the power to most impact national and international economies.
Blockchain and Healthcare Institution
There is a need to improve healthcare regularities globally. When a patient visits a doctor, he or she will have to take the previous records of checkups and reports. Sometimes, these reports and documents are dropped or damaged due to some reasons. These records can be stored online using blockchain where any patient and doctor will have total access. This initiative will revolutionize the health institution.
Blockchain and Politics
The governments come into power through the power of the voting process. We always listen that the mandate had been stolen and some other related news.
This sensitive process of voting will become secure and credible by using blockchain technology as no one can change or alter the public ledger.
It is not wondering to say that this innovative technology will change the financing and other institutions altogether by making them secure and reliable.
The transformation from the centralization of organization and institutions towards decentralization is primary and foremost needs to create an effective globalize system.