A blockchain is only a type of database. It is a concept that seems complicated, but if understood, it's pretty simple.
Here in 'blockchain,' the block means a piece of information, i.e., data, and chain refers to - information/data blocks bound using cryptographic principles. Remember, these data blocks are immutable/unchangeable. Blockchain is governed by a cluster of computers located around the globe. hey are neither owned nor managed by any single entity at all costs. Hence, all data blocks are secured, and no one can alter their info, making this technology the most secure and advanced structure of financial transactions and data sharing.
How does Blockchain Technology Work?
Blockchain technology aims to allow the flow of digital information without being altered. Does blockchain mean the end of SWIFT? First, let's get to know what SWIFT stands for. Its complete form is - Society for Worldwide Interbank Financial Telecommunication. It is a consortium of banks that manages a bulk of global transactions.
You might already know SWIFT or have heard of it because of the Russia-Ukraine ongoing instability in the geopolitical relationship. SWIFT's messaging system allows interbank transfers globally. And these cross-border money transfers are essential to today's global banking system, which amounted to USD 150 T in 2015.
Anyway, is the introduction of blockchain is the end of SWIFT? Well!, we're not there yet! But with blockchain's distributed ledger and its ability to allow transactions with minimal fees, blockchain can disrupt the cross-border fund transfer systems in unimaginable ways, posing a significant threat to SWIFT. And there are reports that the share of messages related to transactions within the SWIFT ecosystem has notably declined. But traction for SWIFT's new product and increase in revenue from alternate streams suggests that SWIFT might be reinventing itself instead of becoming obsolete in a blockchain world.
Benefits of Blockchain Technology Apart from the many benefits that blockchain technology brings with it, below are the ones that make industry leaders go for it: Robust security In blockchains, data is highly secured using cryptographic keys. Plus, blockchain networks are pretty resilient to cyber-attacks and data tampering.
Faster transactions at cheaper costs - Since technology takes care of this, there is no need for traditional third parties like banks and lawyers to authenticate transactions. And it's suitable for businesses to streamline their processes at reduced costs.
Excellent transparency and traceability - Blockchain is unique for transparency and traceability of info that flows before every network member in its database. Blockchain allows access to the entire database related to transactions and their history. As a result, users benefit from real-time transaction-level assurance.
Future of blockchain technology Blockchain is opening doors to new business ways and predicting promising future growth. Insights from Gartner report:
If you have already established at least one innovative business that runs on blockchain technology, it will be worth nearly $10 billion by 2022, i.e., this year. And blockchain will add a business value of over $360 billion by 2026, growing to more than $3.1 trillion by 2030. The concept of blockchain has far-reaching applications. It has many breakthroughs across various economic sectors - NFTs and digital currency and transactions being its focus in present scenarios.
Blockchain's industrial functions involve:
Deployment to facilitate identity management. Supply chain analysis. Smart contracts, and many more. Blockchain technology will be transformative in ways we have never imagined; from the tech and IT sector to healthcare and education, it has the potential to revolutionize many industries within a few years.
Hence, the foundation of time-stamped immutable ledgers or records of transactions that cannot be altered, deleted or destroyed. Isn't this what people want?
And because of this characteristic of blockchains, blockchain is a revolutionary technology in its rights and is also known as distributed ledger technology (DLT), permissioned ledger technology, etc. - they all found their roots in critical concepts for the development of Bitcoin at the beginning of the year 2008. The common thread among them is that they decentralize trust, making blockchain more demanding and futuristic.
Blockchains are shared immutable databases, meaning each concerning party has access to the complete data and its entire history. No single party is allowed to control the information and its flow.
Using blockchain technology, every party can verify each transaction against its copy of the blockchain. Thus, it is nearly impossible for hackers or anyone to forge records or info.
Transaction process In blockchain-based technology, the process of transaction is immediate and permanent. The transaction also leaves its footprints on each node across the system. Every transaction detail, like a price, ownership, asset, etc., is recorded in a blockchain within seconds.
Therefore, blockchain technology offers revolutionary solutions across various fields, from financial transactions to supply chain management, by ensuring data is stored securely, transparently, and immutably.
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