The term ‘Blockchain Technology‘ has been used for an almost a decade with envisaging transformation. Let’s know what the whole buzz all about as we believe in telling it like a story in a manner that even a layman can understand.
Technically, Blockchain Technology Solutions find their application in a wide range of digital transactions involving multiple ledgers and digital money with enhanced security features.
We have known that there is a double entry bookkeeping system in the world of accounting which gives effect to both the payer and payee accounts with the equal amount, debiting the payee and crediting the payer. Now, this system of accounting calls for separate ledger for both the parties and there is always a possibility for reconciling error or misstatement.
Here, Blockchain comes into the picture because it practically eliminates multiple ledgers and made mutually distributed ledger possible to coexist at various locations with the highest possible security and no scope for forgery. The Blockchain is best described as a mutually distributed ledger. All the records of the ledger, known as blocks, are written continuously, chronologically and publicly on the database. For instance, you can lay down a ‘block’ every month with the transaction information carved into it(amount, time, date, etc) with your supplier. Now both you and your supply can see the block, confirming the money was sent and received at the other end. Your supplier can’t claim that there is a mistake in the money received or any case of short payment.
Once the record is inscribed no one can change it as it is cryptographically secured. Even if someone could crack the cryptography, the records are visible to all the members, making it practically impossible to change a block without getting noticed by someone. The most that can be done is to lay down new blocks.
This ‘chain’ continues every month as you lay separate block for every month. Together they create a record of all your transactions with your suppliers.
About Blockchain being the next big thing, when World Economic Forum says, 10% of global gross domestic product (GDP) will be stored on blockchain platforms by 2027, we take it seriously.
Why is Blockchain worth investing in?
This technologically advanced monetary record keeping mechanism offers varied advantages, including but not limited to:
1. Increased transactional trust
Every transaction is visible to all the participants thus everyone is validating the transaction.
2. Reduced fraud
Blockchain makes it difficult to forge, misrepresent or erase any transaction whether monetary or not.
3. Lowered transaction costs and faster processing times
A limited number of systems and organizational infrastructure speeds up the transaction time for relatively less cost.
There is more in the box, stay tuned for more Blockchain related posts.