Blockchain Revolution: Not Just in Banking
IT Consultant at IBA CZ
Though an interest in blockchain has grown lately, not everyone knows what it is exactly about. However, the basic principle is not so complicated to understand.
With a view to a rapid growth of the Bitcoin virtual currency, we hear the term blockchain with ever increasing frequency. The term has evolved thanks to the above mentioned crypto currency. Either it is an inflated bubble or a real potential, it’s undoubtedly the area that is currently swirling the global IT world and that we have to know more about.
From a technical point of view, the blockchain is described as a continuously expanding network of chronological records (blocks). The network is cryptographically secured and shared among all users. In other words, it is a distributed public database of unaltered encrypted records. In the context of cryptocurrency, the blockchain can be viewed as a virtual public accounting book where all transactions are recorded. Individual transaction logs consist of the transaction data, time stamp, and a part of asymmetric cipher. To ensure public accessibility, copies of the entire blockchain (accounting books) are kept by all users. Thus, constant availability of the blockchain and the best possible security are provided.
One of the key features is the verification by other users. After its creation, the record should be validated and then it is permanently assigned to the blockchain. Once the record is verified and eventually added to the blockchain as a block, it is distributed among other users. Concurrently, this block can no longer be processed or modified.
The increase of investment in virtual currencies implies that in the coming years, the capital in cryptocurrencies can be transferred in more extended amounts than today. Alongside with this, we can expect the increase of demand for the blockchain use.
However, blockchain has a wider applicability than just the financial industry. One of many possible use cases is a so-called smart contract. These are business contracts created automatically using blockchain. First, a distributed database finds out all the terms of the contract between a customer and a vendor. Then it determines whether the conditions have been met, uses the information from every network node, and authorizes the related payment.
This revolutionary approach is expected to be used not only in banking, but also in other sectors. The blockchain area is already being addressed by some IT companies that are trying to implement different use cases of blockchain in practice. Is it your future too?