Blockchain technology is a revolution in recording systems.
Bitcoin is the first permanent, decentralized, global, untrusted record ledger in history. Since its invention, entrepreneurs from all walks of life around the world have begun to understand the significance of this development.
The nature of blockchain technology is reminiscent of madness, because the idea can now be applied to any trusted record. It also holds all the power of encryption in the hands of individuals, preventing digital relationships from requiring trading institutions to conduct so-called “pull transactions”.
Of course, there are also a lot of hype. This kind of hype may be the ease of implementing advanced use cases for blockchain technology applications. It is described by some of the smartest people in the industry as "Magic Beans."
How to test blockchain technology is applicable to our guide "Why use blockchain?" and more. Now let's discuss the development of blockchain technology and see how useful it is.
As a recording system.
The encryption key in the hands of the individual allows for new ownership and the basis for establishing interesting digital relationships. As we discussed in the guide, “What is blockchain technology?” “How does blockchain technology work?” and “What can the blockchain do?” The blockchain provides the creation of a powerful digital identity system. opportunity.
Because it's not based on accounts and permissions related accounts, because it's a push transaction because private ownership of ownership is a digital asset of ownership, this place is a new and secure way to manage identity in the digital world, avoiding exposing users to share too much Fragile personal information.
To validate a unique physical item, the item is paired with the corresponding digital token. This essentially means that tokens are used to bind the physical and digital worlds. These digital tokens are useful for supply chain management, intellectual property, anti-counterfeiting and fraud detection.
Inter-organizational data management
As stated in our guide, “What is a distributed ledger?” Blockchain technology represents a revolution in information collection and collection. Instead of maintaining a database, it manages a logging system.
The government is interested in all three aspects of blockchain technology.
First, there are ownership rights in terms of encryption key usage, revocation, generation, replacement, or loss.
They are also interested in who can act as part of the blockchain network.
They are interested in blockchain agreements because they authorize transactions because the government often regulates transaction authorization through a compliance mechanism (such as the format that the stock market regulator authorizes trading in the market).
For this reason, many blockchain developers believe that compliance is a business opportunity.
Read more in our guide on “How does blockchain technology change finance?” and “What can the blockchain do?”
By using a client-server infrastructure, banks and other large organizations that help individuals establish digital relationships on the Internet will be forced to ensure that users have account information about hackers.
While banks can spend billions of dollars to keep information safe, the system is currently asking companies to do the same. After all, we share the same information with these companies. However, companies are attacked and hacked, sometimes exposing their private financial details.
Blockchain technology provides a way to automatically create records that have access to information or records and set controls on the permissions that need to be viewed.
This also has a major impact on health records.
As a platform
Blockchains are places where digital relationships are formed and stabilized.
A consortium of the world's largest banks, as well as several insurance companies led by a startup, are seeking to establish a platform to establish new digital relationships between banks. Their approach to ensuring these new digital relationships is the combination of Ricardo's contract and coding business logic.
In short, this version of the smart contract attempts to support complex legal agreements with information and files stored in the blockchain.
Other startups are also researching sidechains – custom blockchains specifically designed for large public blockchains. These "federal blockchains" can overcome problems like bitcoin. It is believed that these organizations will be able to create blockchains that authorize transactions of a particular type.
Ethereum takes the platform concept even further. In the white paper of Vitalik Buterin, a new type of smart contract, "Next Generation Smart Contract and Decentralized Application Platform", was first introduced. The idea is to apply business logic on the blockchain so that any complex transaction can be encoded and then authorized (or rejected) by the network running the code.
Therefore, the main purpose of ethereum is to become a platform for intelligent contract code, including procedures for controlling blockchain assets, executed by blockchain protocols, in this case running on the ethereum network.
Bitcoin itself is an example of automated governance, or a DAO (decentralized autonomous organization). It and other projects are still experiments of governance, and there is a lot of research on this issue.
Read more about this in our guide "What are the problems and limitations of the blockchain?"
On the market
Another way to consider cryptocurrency is as a digital bearer bond.
This simply means creating a digitally unique identifier for the key to control the code that can express a particular ownership (for example, it can own or have something else). These tokens mean that ownership of the code can represent a stock, an entity item, or any other asset.
Rules on how to handle these tools can be coded through the blockchain protocol.
Streamlined clearing and settlement
In the world of stock trading, we often hear the word "T+3". This means that trade (T) is 3 days before the transaction is accepted (settlement). There are some non-blockchain methods that can make this number drop, but it also reduces security and risk.
However, in blockchain technology, trade is settled and we have a T+0 equation.
In our guide "How does blockchain technology change finance?"
Automated regulatory compliance
In addition to being a trusted repository of information, blockchain technology can also achieve code-based compliance—in other words, how to effectively convert a block of data into a government code article of digital code.
In the case of banks, this may mean improving the efficiency of anti-money laundering (AML) compliance. Blockchain technology can be handled differently according to precise rules, allowing transactions or reporting of a certain type of transaction.
This means that banks can automate regulatory reporting or transaction authorization.
All of this work is done to make people digital relationships that were previously impossible. Data is disclosed in different ways, secured in different ways, and recorded in different ways.
This changed the digital relationship and created the ability to automate code through "smart contracts."