Blockchain and cryptocurrencies are the new black in town and with so much information going round one might miss out on its impact and how it aims at changing how we do business.
Blockchain — A decentralized collection of ledgers stored in servers and hard drives all over the world.
Ledger — a collection of transactions done.
The aim of blockchain technology is to eliminate the middleman otherwise known as the banking system (pun intended). How? one would ask. Working for a company that sells consignment vehicles, I can rest assure you that dealing with banks can be a menace especially when moving large sums of money. The process of verification especially while performing cross-border transfers could actually leave you on the verge of loosing business.Even with the invention of RTGS, time factor still remains a challenge in the banking sector. It becomes really hard to explain to a client that even with proof of a swift confirmation that you are not able to deliver the vehicle since the amount has not reflected in our accounts.
So what would blockchains do differently?
Once one transacts using a virtual coin, the transaction is approved by a series of nodes that contain blocks of information on similar transactions.
Node — computer(s) connected to a network
Block — series of verified transactions recorded on a ledger.
Once signed and verified, the new transaction is added to the blockchain and broadcasted to a peer-to-peer network of nodes. This process takes a very short time since there is no one central command that looks through the transactions for approval. Alteration of records is also a thing of the past due to the fact that a particular transaction record is linked to the record of the preceding one. Due to the anonymity of the nodes, no one person can have access to the decentralized database and change information on the blockchain.
One might be discouraged by the very many technical terms used in blockchain technology but it just might be the breakthrough we have been waiting for. Dean Kamen once said that, “Every once in a while, a new technology, an old problem and a big idea turn into an innovation.” It is a privilege to be born at such a time where digital currencies and blockchain technology might just revolutionize our markets.
Emmaculate Wanjiku Kamau