What will the impact of the blockchain be
Current opportunities and risks of blockchain technology
, Munich, Concierge | Author: Herbert Wieler
Fundamental consequences for the financial industry
The idea of blockchain technology originated back in 2008. Today, more than a decade has passed, experts agree that the technology is on the verge of a breakthrough. Can the blockchain really cause a revolution?
How can blockchain change our future?
Where the nerds, economists and analysts (almost) agree, the blockchain is an economic milestone with effects that cannot yet be assessed today. Because the disruptive technology enables a global register that assigns ownership and, if necessary, can also transfer values within seconds.
A big advantage: the blockchain cannot be manipulated and is also organized on a decentralized basis on millions of computers. In other words, there is no intermediate instance here - both states and banks are completely excluded.
In addition to the “Internet of Things”, the blockchain should also provide the “Internet of Values”. That would not only have fundamental consequences for the financial sector - if the idea of the decentralized and unchangeable data register is implemented in reality, the entire corporate landscape could be revolutionized as a result.
The blockchain from a technical point of view
If you look at the blockchain from a purely technical point of view, this is a distributed transaction database. The specialty is the structure: The blockchain grows by adding one digital block to the next - each block has a chronological predecessor as well as a successor. Incidentally, the links between the blocks cannot be broken. In the end, a list is created that documents the values of the users and all saved data records.
The blockchain is growing into a huge digital data set that is updated chronologically and also archives the transfer activities taking place in the network. It should be noted that the blockchain is not located on a single server, but each network participant, i.e. so-called nodes, has a complete copy of the blockchain on the local memory.
Probably the biggest advantage? The decentralization. In other words, there is no central network manager with the blockchain - every network participant has equal rights. The database is distributed in such a way that each participant has a current version of the data.
Another point that should not be left unmentioned is security against manipulation. There are separate authorization and validation measures that run across the entire network. The data stored in the blockchain are protected by the forgery-proof mathematical processes so that there is no need to be afraid of any data misuse or fraudulent activities.
In addition, the blockchain enables direct transactions among network participants. There is no third instance here. This means that in this case no “middlemen” are required any more.
In addition, business processes can be optimized in the financial sector, IT and administration. This enables faster processes and also quality improvements - and that without additional costs.
It should be noted that blockchain technology is not yet freely scalable. If, for example, one were to use bitcoins to make the same number of transactions that run on Visa credit cards, then data with hundreds of terabytes would result. This means that these would then have to be saved for each network participant.
Speaking of Bitcoin: The forecasts are very promising - if you want to buy Bitcoin with PayPal because you are convinced that the price will rise again soon, you should take into account that the platform also accepts the online payment service.
Integrating it into the existing IT landscape is of course also a challenge. Above all, the small and medium-sized businesses will have to fight for survival. Because if the existing hardware and software components cannot harmonize with the blockchain, there is a risk of not being able to keep up with the competition.
The transparency may be an advantage, but it is also a disadvantage that should not be underestimated. Because there is insight into the transaction history here - that is, the competitors see price details, among other things. The fact that a private person is not interested in every participant seeing the income and expenses may well be understandable at this point.
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