The future is now! We are going to travel in the crypto-currency world and understand it piece by piece. In my previous post, I discussed on "Currency Evolution" and "Which ICO will I Invest?". And now let us travel deeper and discover what blockchain really is.
A blockchain is essentially a record or a ledger of digital events one that is distributed or shared among many different parties. It can only be updated by consensus among a majority of the participants in the system and once entered, information can never be erased. The blockchain contains a verifiable record of every single transaction ever made.
The key value in blockchain lies in its nature - a decentralized system where it's encryption cannot be altered. Once a digital identity has been created and successfully associated to an authentic identity, all their previous and future transactions can be traced back with 100% accuracy thereby leading to full transparency - that is why it enticed both bank and regulators alike.
At a high level, there are two types of blockchain private and public. In a public blockchain, you are trying to convince every stakeholder to agree to changes at the same point. While in a private version, we don't run into similar complex computational issues as we trust everyone on the network because we have agreed to join it in the first place. If public blockchains are internet then the private blockchains are intranet. The banks intend to use a fusion of private and public replicas of the technology rather than the original version of blockchain which was public. The result is a more robust system where entries can be made transparent only to selectively parties, hence the level of consensus that is required becomes lower thereby achieving faster settlement.
In conclusion, blockchain is a solution looking for a problem and not a problem looking for a solution. Countless economic applications like trade finance, anti-money laundering, know-your-customer and payment services that utilize the blockchain or apply the concept in an innovative manner are in the pipeline. How the evolution of the blockchain ecosystem plays out is about as clear as the development of the World Wide Web in the early 1990's. That is to say, the path is not clear at all but clarify is a bit every day and it certainly is worth following.