We live in a world dominated by technology for better or for worse.
We use technology for entertainment, communication, education and sharing stuff with the world to name a few. But one of the main reasons we use technology is to generally make our lives easier
Before the invention of emails, to communicate you had to write a letter which you would then send in the mail… I assume a carrier pigeon would then deliver that letter and you would have no idea the letter had arrived until 3 weeks later when you received a reply. We can now communicate with someone on the other side of the world in real time with no delay and no risk of our message not arriving. We can even see their face on the screen and speak to them if we please.
Before the invention of internet banking you would have go down to a local branch and withdraw a cheque /cash which you would then give to someone else, they would then have deposit it back with their local branch, all of which takes time and has inherent risk factors.
We can now use internet banking to send money anywhere in the world to anyone else who has a bank account.
However a few problems still exist in the financial world and while we can deliver a message in seconds, the same cannot be said for a payment.
Enter blockchain technology …
What is blockchain technology?
You may have heard of Bitcoin in recent years, you’ve maybe even heard of a number of cryptocurrencies and how they can process cross border payments in a fraction of the time a bank can process the exact same payment. All of this is made possible by the blockchain technology first created by the inventor(s) of Bitcoin Satoshi Nakamoto
In short blockchain is an open digital ledger in which transactions of a specific cryptocurrency are recorded publicly. The transactions show the amounts of the transfer and where the cryptocurrency has been transferred from and to however rather than displaying the names of the parties sending the cryptocurrencies it shows something called a public key, meaning the individuals remain anonymous, kind of like a digital equivalent of data protection.
The transactions are verified by the community members who earn the cryptocurrency for verifying the transactions, these are known as miners.
So when sending a payment using cryptocurrencies you simply load up your digital wallet, click send and type in the other users wallet key or scan their QR code, this transaction will then go into the pending transactions on the blockchain where the mining community will verify the transaction. This entire process will be completed in minutes rather than days.
The blockchain technology also removes the need for a third party (a bank) to process and the transaction as the whole thing is in a kind of self sustaining economy this means charges are far less than you would expect to pay for sending an international payment.
So as a whole using blockchain technology to send cross border payments is faster, cheaper and easier. Even more exciting than is that this is only one of the potential uses for blockchain technology.
What else can you use blockchain technology for?
Blockchain has many other potential uses and over the next few years we are certain to see many more ideas being developed using blockchain technology.
One of the most exciting new developments is smart contracts, this is a way in which you can use blockchain technology to create a contract. Like with any contract you define what it is you are exchanging, this can be goods or services and you also outline the rules, regulations and penalties within the contract
Using smart contracts is another way of removing third parties, you would typically draw up a contract with a lawyer who would ensure that the contract was carried out by all parties involved, as with everything in the world we live in they would charge a hefty fee for their services.
Smart contracts can be used. By anyone from individuals, traders, governments, small and large businesses. You could even give your children their pocket money using smart contracts
. that is if they carried out their side of the smart contract and tidied their room
Blockchain might just turn out to be one of the most important technological advancements since the invention of the internet. To put into context how much potential blockchain technology has
I will leave you with a brief list of other ways in which we may see this technology implemented in the end few years:
- Online identity
- Selling properties
- Taking out mortgages
- Peer to peer lending
With so many possible ways to make our day to day lives not just easier and more efficient, but to also save money along the way. It is only a matter of time before we see blockchain technology become an integral part of the entire global infrastructure.