7 key facts about blockchain

Blockchain opens up a wealth of opportunities and perspectives for information exchange. Let’s try to understand the main nuances of the content of this mysterious term.

What is it in simple terms?

Blockchain is a database with information about all transactions made by participants. The trick is that the database is distributed, which means it is not centrally audited. The data is stored in a blockchain format, with each block storing a specific number of transactions. The analogy of a necklace of pearls is apt. Each pearl is like a block or a record. The chain cannot be deleted or destroyed, making monetary transactions or information exchange processes more efficient and reliable. People who do not know each other can share reliable records of events. Due to the lack of counterfeit possibilities, the system has been found to be resistant to corrupt practices.

How did the term ‘blockchain’ come about?

An unknown person or group of people nicknamed Satoshi Nakamoto published a manifesto article in 2008 describing the main benefits of the technology. A decade and a half later, there has been much speculation about who might have published material with the idea of a decentralised settlement scheme. Some analysts are leaning towards Russian-speaking origins, but there is little evidence yet. The start-up block generated in 2009 has turned into a huge toolkit with more than 2,000 modifications.

The blockchain and bitcoin connection

The first application of blockchain was a bitcoin transaction. After transferring money between users’ wallets, bitcoin became popular itself and popularised blockchain technology. The development of transaction schemes led to the formation of various cryptocurrencies and other non-payment instruments.

Cryptocurrency as the most common way to leverage blockchain

Blockchain technology offers a high exchange rate combined with minimal time, high quality and reliable services. The level of availability is also impressive. Standard financial markets cannot offer a similar quality of service. The crypto industry remains one of the main applications of the tool. With blockchain, specific tokens are issued, and assets are debited and transferred according to the immediate demand of investing individuals and companies. Ether and bitcoin have a global scale of circulation.

Blockchain for banking

Technology improves the security, reliability and transparency of processes in the banking system. Money transfers, letters of credit, routines, KYC payments, settlements in securities transactions, and other tasks are done faster and more accurately with the implementation of this efficient technology. In the Perspective, the costs of banking structures for these processes may fall by half and some market participants may disappear for lack of use.

Helping blockchain preserve cybersecurity

Each node in the technology stores copies of the database. These are checked against each other, allowing hacker attacks to be prevented or stopped at an early stage. The anonymity of the applications does not prevent real data identification information from being backed up. There is even a startup for secure data entry followed by traceability and transfer of property rights. This is very convenient for real estate companies. Blockchain is also useful in logistics, healthcare, energy, IoT and other industries.

Predictions for the international market

Big companies formed consortia back in the mid-tens and are actively experimenting with various blockchains. The use of the technology will be a kind of pass to the elite club. We should not expect a repeat of the 2017-2018 hype, but blockchain will be increasingly adopted in the public and commercial segments. The stock market will transform and some of the restrictions will become a thing of the past. In a few years, the benefits of the system will be so clear that even the most conservative government representatives will be forced to adopt it – at the legislative level.