POSTED IN BITCOIN
By now, few would argue that blockchain, the technology behind bitcoin, has not broken new ground. In fact, the success of blockchain has extended to an array of other fields as companies adapt its use in ways that best suit their individual needs. Whether interfacing with bitcoin or using blockchain technology in the Internet of Things (IoT), blockchain has become a compelling value proposition across many industries. This is due, in large part, to the fact that blockchain can be used to record not just financial transactions but everything of value. The incorruptible digital ledger originally developed to underpin bitcoin is now employed in many other ways. Because digital ledgers are just a method of recording data digitally, they can be applied to anything that needs to be independently recorded and verified as having occurred, such as financial transactions, agreements, contracts and ownership.
At first, blockchain was little more than a tool designed to solve the problem of “double spending” in bitcoin. In 2014, projects began to emerge that used bitcoin blockchain for additional digital assets beyond bitcoin. Just a year later, many banks and financial institutions all over the world were researching possible uses of the distributed ledger both in finance and beyond. Blockchain has several features that financial services companies find particularly attractive. For one thing, it is decentralized. That is, it does not have a single point of failure. As a result, it is more secure because it cannot be hacked at a single access point. In addition, it utilizes cryptography to validate every transaction. The encryption in the software ensures that it cannot be altered, and is essentially tamper-proof. Digital ledgers are efficient because the change of information is quick and easy, and they are transparent in that every transaction is documented.
Rather than having a central record-keeping system, identical records are spread across all users of a connected network. The digital ledger is updated across the network and transactions only go through when enough parties on the network sign off on them. The technology eliminates the need for costly middlemen in financial transactions, and because the digital ledger provides a high level of cryptographic security, financial services companies are able to use blockchain to provide services more effectively while at the same time saving money.
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