If you’ve spent any time at all reading about cryptocurrency, you know that blockchain technology is an important part of the system. However, Bitcoin and the other currencies that have arisen out of this form of technology is just the tip of the iceberg. If you want to understand what blockchain is and how you can pursue blockchain development with your business, we have put together a basic primer for you.
Just What is Blockchain?
Basically, a blockchain saves transactions on computers all over the world, sort of a ledger that exists in a cloud instead of in a dusty binder in an office. Blockchains undergo registration so that no one can go back and change them later. This makes transactions safer, more transparent, and less expensive to undertake. Blockchain also eliminates the need for third parties to place their official seal of approval on the transaction’s security, such as a bank or a notary public.
As you might expect, this technology has become crucial for businesses in a wide variety of sectors, most notably in banking. The ability to undertake blockchain development has led to thousands of new employment opportunities. Not all of these jobs are in banks, of course. Many startups that handle health care applications, mobile payment solutions and a number of other sectors that rely on trust in transactions all need help with blockchain development.
How Does Blockchain Work?
If you look inside one of these digital ledgers, you would see transactions organized into blocks and then recorded sequentially in the order they occurred, in a chain, which is where the term “blockchain” comes from. Each block has a link to its content, but cryptography is used to protect those links. This means that it is not possible to forge or destroy transactions that have already occurred. Thanks to that cryptography, there is no need for a third-party service to provide security for the transactions. The blockchain can be used to store, move, and document any sort of asset with automation and ease – and without a need for a centralized third party. For these reasons, the financial services industry continues to look for ways to put blockchain to work for them, and the startups are not far behind.
Imagine using blockchain to transfer capital among parties. In one automated transaction, all involved parties receive the necessary data simultaneously. The cost of infrastructure would shrink considerably. Data management improves, as do transparency and speed of processing cycles. The first financial services company that used blockchain development to devise a product was NASDAQ, which developed NASDAQ Linq. This runs capitalization tables with blockchain and is a service that private companies utilize to manage shares within their companies. There are other applications for blockchain as well. Santander was the first British bank to transfer live payments across international borders using a mobile app that relied on blockchain. These changes can reduce remittance costs from as high as 20 percent to as low as 2 percent. It will be interesting to see how far blockchain takes financial services.
