Bitcoin released in 2009 quietly with a basic post to a niche mailing list. The interest in this cryptocurrency and others has exploded since then, but there is even more attention directed toward its underlying technology.
Blockchain and distributed ledger technologies have grown into a global movement that supports a wide variety of industries. It has the potential to transform almost anything it touches, bringing in a much-needed level of security and transparency.
The blockchain movement is here to stay. That means there is only one question that remains: how will each business embrace this technology?
Why Is the Blockchain Movement so Popular?
The blockchain model is intuitive and straightforward. There is no data store or central authority because the chain receives peer-to-peer network distribution through nodes and participants.
Transactions get added to a block, which is then replicated to every participant that needs to validate the transaction. Once this action occurs, it gets added to the chain.
That is where the value of this technology exists. Any block can contain references to its preceding one. If someone tries to manipulate the content it holds, then it loses validity.
It provides three key benefits that businesses in any industry must consider.
1. It provides a distributed system of record.
Blockchain offers a distributed ledger that provides information storage and distribution. It can manage P2P transactions within its decentralized network at any time. This benefit is the reason why projections of this tech market are higher than 60% compound growth.
2. Blockchain offers smart contracts.
Smart contracts using blockchain can execute transactions automatically based on an agreed-upon sequence of events. This advantage means that the need for a central coordinator disappears. The code runs in parallel to reduce risks and increase efficiency simultaneously. Blockchain helps to generate, receive, and exchange information more effectively thanks to this benefit.
3. It creates a basic level of security.
Since the blockchain movement doesn’t need a central database, there is nothing available for hackers to attack. Agencies can create private blockchains, restrict actions to specific individuals, or go public and let participants be dispersed and anonymous.
Does Blockchain Work for Everyone?
There are numerous use cases for blockchain that make it a usable technology for most businesses. Its benefits are already being experienced through an improvement in claims, transactions, and utility deployment.
The blockchain movement might be here to stay, but there are still some questions that require resolution.
Some companies need to figure out how they can get data into and out of the blockchain. There are concerns about extending smart contracts or responding to events that happen inside and outside of the technology.
The blockchain movement isn’t fantasy. It is also not suitable for every use case. This technology does provide an attractive structure for trusted collaboration and exchange opportunities in a world that continues to digitize rapidly. The only way to determine if it is something useful is to start experimenting with it to see if the tech can meet your needs.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.