Essay on Blockchain Technology
Free 750 words essay on Blockchain Technology for school and college students.
A decentralized ledger of digital currency transactions on a peer-to-peer network, blockchain technology is one that has revolutionized both financial arrangement and computation. This database of transactions is essentially a chain of computers that must all approve an exchange before it can be verified and recorded. This optimisation of safety is done by employing cryptography. The hype over this revolutionary technology is valid and limitless. It can work for almost every type of transaction involving value, including money, goods, and property. It can transgress boundaries for transactions and is not under control of any sovereign body or agency. It helps reduce fraud as every transaction would be recorded and distributed on a public ledger for anyone to see. Although at present a very small percentage of world’s GDP is stored in the blockchain, however, there are enormous chances of it being significantly mainstream soon.
On an elementary level, blockchain is a distributed database that maintains a perpetually growing list of records called blocks. It works like every block has a timestamp with a link to the previous block. It has been designed in such a way that data in the block cannot be altered retroactively, which means once recorded it cannot undergo modifications. Every system in the entire centralized database has its own firewalls and guards. At the time of a transaction, both the buyer and seller broadcast the transactions. In this process, a new block is added to the chain while all other computers in the chain update their personal records or ledger.
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Blockchain technology has turned from hype to trend. The Central Bank of Canada has planned to develop a digital version of Canadian dollar based on blockchain technology. Visa is already developing a new real-time transaction system designed for the exchange of high-value international payments. Sweden has tested the blockchain technology for the land registry, that could potentially replace complicated systems with one database. Companies such as Microsoft, IBM, UBS, and PwC are racing to adopt blockchain. A financial technology consultant site Aite estimated that banks spent $75 million last year on the blockchain. In fact, the Silicon Valley titans and venture capitalists are also readily interested in investments in the blockchain.
Implementation of blockchain can be seen in certain other fields such as Executing contracts, safely buying and selling intellectual property, distributing important medical information, ensuring that voting in elections is incorruptible, etc. The blockchain is the first native digital medium for peer-to-peer value exchange. The heavy-duty encryption ensures the integrity of data. As the Internet of Things approaches the mainstream, billions of connected smart things will need a secure ledger. Blockchain technology can be used in redistributing wealth to distributing value and opportunity fairly in the first place. This technology would unleash a new age of entrepreneurship and won’t just remain as the disruptor of financial services.
Blockchain can make device management easier, greatly impact traffic network, optimise Internet of Things, and change the entire global logistics business. Leveraging blockchain for IoT would offer new ways to automate business processes without setting up complex and centralized digital infrastructure. IBM suggests that finance, risk management, healthcare, and insurance are systems poised to make incremental changes through blockchain technology. It would build trust between parties and devices, reduce the risk of tampering or collusion, reduce the cost associated due to intermediaries, and accelerate transactions. Observations and calculations have suggested immense benefits arising out of blockchain for even small businesses. It reduces time spent on paperwork and administrative tasks, reduced transaction fees in payments, and diminish disputes that might arise. Blockchain can even be used to help maintain medical records.
Bitcoin, a cryptocurrency that employs the blockchain technology has turned into a rage with blazing fast market share. According to an estimate angel investors and venture capitalists have poured $180 million into blockchain startups this year. JPMorgan, the London Stock Exchange Group, Wells Fargo, and State Street recently announced they joined a consortium with IBM, Intel, and Cisco and blockchain startup Hyperledger to develop blockchain technology.
This transparent and incorruptible technology is recreating the web infrastructure. It would produce smarter contracts, help the sharing economy, get crowdfunding, enhance transparency in governance, predict markets, protect intellectual property, help identity management and data management, enable land title registration, accentuate stock trading, etc. In fact, new ideas have been floated such as digital voting, decentralized notary, and creation of digital identity altogether among other things. Blockchain technology as a disruptor is set to revolutionalize the world of computers and web, with scope and potential in almost every field.Tags: blockchain essay