What is the Blockchain and Why is it So Important?

By on August 9, 2017

Nowadays the development of the Internet and all those resources presented there is so terrific, that sometimes we may be scared of it. One of such quickly emerging and a bit troubling technologies is bitcoin and blockchain. Both of these technologies are revolutionary and absolutely unique for the whole world. Since the last several years bitcoin is no more a toy for cyber developers and hackers but one of those pillars on which the world is going to be situated soon, while blockchain identifies the foundation for that evolution. Moreover, one of the most important and widely known resources have been predicting the skyrocketing development of blockchain and other related resources in the field of modern world building.

Blockchain for Business

Today it is obvious, that the usage of blockchain for business is not a surprise at all. For instance, we can come up with several highly good examples of those industries, where such a technology has already left its footprint. One of the most important of them is the world banking system. Despite of the fact, that lots of people and so-called “progressive analytics” have been predicting the rapid reduction of the whole banking system in the world, that is not a 100% truth. In case of the emergence of a new technology we have to keep in mind, that the most powerful world forces are not stupid and would be willing to interfere in that industry, safe its own and obtain certain revenues for the last one. Because of it the leading banking group of the world, headed by the Swiss UBS Bank, including such giants as Deutsche Bank, HSBC and Unicredit banks were thinking on the development of the new cryptocurrency, which would be similar to bitcoin, but will have several special features. That cryptocurrency is called USC and is similar to the basket of currencies, launched by the european countries before the integration of Euro. Simply speaking it is a collection of all the world currencies, backed by the leading ones and attached to USC on the cyber level of the world web.

 However, that example is not the only available. For instance, Google corporation made a decision on launching the blockchain system to make the transfer of documents and information within the whole machine much more easier and safer. Moreover, that is not all. Australian central post office made a decision on launching a special voting system within the state of Victoria for the next governmental elections, which would be based on the idea and strategy of blockchains. Such a decision was made to improve the level of state security after the series of the russian cyber attacks launched during the US elections night in 2016.

Which industries is it going to influence?

When we ask such a question we have to be ready, that the answer is going to be simple and radical. Blockchain influences all the existing industries and even leads to the decrease of some of them. Here, I would like to give you a small analysis on those key fields of our lives, which are going to be hit or have been already hit by that rapidly developing branch of modern cyber world.

 In case of such analysis let me separate the whole world business on several vital groups. The first one is Smart Contracts, another one is Digital Currency, the third one is Record Keeping and the last one is Security. Now, imagine, that under each of these groups there are dozens of other important and highly developed industries. For example, in case of the examination of the first very field, we may say, that such fields of economy as digital rights, wages or escrows are going to be under a huge effect. While talking about the second group it is suitable to mention even more aspects, such as: e-commerce, global payment, banking system, lendings and microfinance. In case of discussing the record keeping we can not forget about such industries as healthcare, title records, voting and ownership.

We can even take as example a historical case study. For instance, in the middle of the 19th century, when oil was found in the North-Eastern part of the USA, the whole industry of the state was blown up. BEcause of the development of oil industry, building of the pipelines, evolution of stealing companies, such businesses as train transportations, wood crafting and whale hunting were gone in ages and led to the erection of monopolists, who saved their status before a certain moment. The same tendencies could be easily seen nowadays.

How does it work?

When we talk about blockchain or bitcoin and comparing them with the already existing economic strategy of the world development we can notice, that these two strategies have several huge differences. First of all, in the modern financial industry we face such a thing as third parties. Among them, we can list notaries, banks, governments, printed money and insurance companies. However, the authority of these institutions was damaged because of an enormous economic collapse of 2008, which actually became a year of birth for bitcoins and blockchain strategy.

So, from the highlighted information we can make a simple conclusion, that the blockchain net is focused first of all on the elimination of these third parties, which authority is declining, while the desire of people is not growing anymore. For example, after the collapse of banks in 2008 people already do not look at the history of the banks and the date of its foundation, they are just looking for more security, and thanks to that enforced development of bitcoin and blockchain in 2017, that desire of secure money storage have only grown up and became stronger, that is why, that idea got so much popularity.

Making a long story short, blockchain is  a cyber net of transactions, where all the information is free, but the possibility of interference of the third parties to that particular process equals zero, because of the fact, that each part of the information about one user contains in the set of information about another user, while the whole system is based on a high level of interdependence. Moreover, all the data, financial transactions, accounting and deals are secured by special highly complicated mathematical equations, while only computers are able to solve them and even for such machines it takes up to ten or more minutes. So, in the very end, I would like to say, that the blockchain is a united source of truth, available for all the people, but which cannot be changed by them directly, unless this information belongs to you.

Summing up…

All in all, I would like to say, that blockchain is another highly controversial technology with big opportunities. From the one point of view we can say, that it is going to change our world in a much more positive way, while on the other hand it is going to destroy the core foundation of the world business, which has been developing for centuries and faced numerous conflicts, crisis and declines. In any case, I can not still give a clear answer on the question of the future of that industry. However, it is undisputable, that we have to keep in touch with new technologies and change them in a way we need even in case if the development of them took away our old business. So, we have to operate with cool blood with any new innovation if we want to achieve our real goal.

About Michael Volokhai

The author of this article is Michael Volokhai, a freelance blogger working now for Artjoker, a software development company that specializes in startups, mobile and web development.

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