Ever since the launch of Bitcoin back on January 3rd, 2009, a new digital technology has been growing and changing, and in recent times has inundated the world with a number of digital currencies and decentralized applications (and a good deal of news)… the blockchain. A blockchain, simply put, is a distributed ledger (often called DLT – Distributed Ledger Technology), where essentially a ledger with continually added information has constantly updated copies of itself spread out over a large network of computers. It is often touted to be immutable, but this is not necessarily true. Some have hailed it as the greatest innovation since the internet, or even titles with grander prestige, while others have belittled it to nothing more than a gimmick. It has captured the eyes of both the public and private sectors. From individuals, to corporations, banks, and governments, this new technology has added a whole new dynamic to the world of Fintech.
It has enabled cryptocurrencies which have both made and lost millions, if not billions, and has become a new bulls eye for cybercrime and hacking, as well as for dishonesty and fraud; At the same time it has enabled new levels of P2P functions and remittances, new levels of transparency and reduced paperwork in the shipping industry and supply chains, and could very well have a multitude of applications. Despite this, however, and some companies praising their experience with blockchain, the technology has been criticized by some large corporations as not offering any benefits over their existing systems (this has probably been the case while testing the concept of private blockchains [as opposed to public blockchains]). Reports vary, from saying that most businesses have no intention to use blockchain technology, to others saying that most businesses are “dabbling” in it (though that would not indicate moving forward with long-term implementing). At the same time, reports of big time companies doing something with blockchain keep coming around.
As with any technology, blockchains do have their pros and cons. On the positive side of things: there’s no single administrator; blockchain users are in control of their information and transactions; high quality data is widely available, complete, accurate, consistent, & timely; the blockchain does not have a single point of failure, we are told, and it’s better able to withstand against malicious attacks; automated processes, so transactions should be executed exactly as coded; transparency; simplification of processes; and faster transactions which can go around the world in minutes or seconds, 24/7, & often with lower transaction costs. On the negative side of things: because of their nature, blockchains will always be slower than centralized databases, as not only does one need to do everything a regular database does, but it also must have every node in the network process a transaction, every transaction must be digitally signed using a public-private cryptography scheme, and it must be made sure that the nodes have reached a consensus; blockchain integration into an existing business’ systems may be difficult; there is always uncertainty about regulatory status in different countries; some blockchains require the consumption of huge amounts of electricity; there’s a lack of trust in blockchain technology concerning the control, security, and privacy of personal data & blockchain must still face the hurdle of cultural adoption; getting a blockchain setup can be a high initial cost; and blockchains are still new and have others issues as well that they need to tackle before wider adoption will likely happen.
With all that said, take a look at this awesome infographic we found on the subject:
Infographic created by Cyberius.
