Blockchain is considered one of the most advanced IT technologies. She helps shape new business models in various sectors of the economy, both for large companies and startups. Experts believe that blockchain will become an integral part of our lives shortly.
Blockchain is a chain of blocks that contain certain information—all blocks in the chain-linked to each other. The block filled with a group of records and newly emerging blocks is always added to the end of the chain and duplicate the information contained in the previously created structural units of the system, adding a new one to it. The prospects for using this technology are incredible. We also recommend reading It has been ten years since the financial crisis. What to fear in the future?.
According to CB Insights, the blockchain will soon transform such industries as cybersecurity, exchange trading, and insurance. The technology of the future, extending far beyond banking and online payments. Soon it will cover such areas as car sales and leasing, property co-ownership, trade and logistics, energy efficiency management.
Blockchain will serve more than just the economy. Education, healthcare, voting and electoral systems, government, jurisprudence, and much more will also be transferred to blocks.
Why do companies develop solutions "in the cloud."
Despite its promising potential, blockchain is still not ready for widespread adoption in business processes. Everything related to scalability - attracting new users, data transmission security, and information privacy - requires additional development and software.
To this end, large IT and hi-tech companies such as Microsoft or Intel see three areas of work in blockchain improvement.
The first is cooperation with companies that develop this technology and with teams that understand what the market needs to maximize blockchain adaptation in production and distribution chains.
The second is active participation in various blockchains' development processes with leading platforms on the crypto market to implement their ideas. In this situation, crypto market participants are using new developments, and companies are expanding their presence.
And the third direction is to play with already existing block-based solutions and state blockchains.
Today, ready-made blockchain solutions already exist. For example, thanks to the Microsoft Blockchain functionality as a Service (Microsoft Azure BaaS) service model, you can quickly create, test, deploy, and deploy ready-made blockchain solutions for various systems. It makes distributed ledger technologies available not only for large players but also for small and medium-sized businesses.
For example, Intel uses Sawtooth Lake, an open-source blockchain platform for the supply of seafood, as part of the Hyperledger project. With distributed ledger technology, shoppers can follow the entire process from catching seafood to serving.
Banks are primarily interested in these developments. Over the past two years, many large structures such as JPMorgan Chase, Goldman Sachs, Credit Suisse, and Deutsche Bank have focused on asset management. This prompted IT companies to join forces with financial conglomerates to build an Ethereum-based platform for financiers.
The product will be similar to the private Quorum blockchain. It's a minimalist fork of the Go Ethereum client. It allows you to make several hundred transactions per second and provides almost complete security since the parties can only confirm smart contracts.
This is a kind of abstraction for a consortium for banks when a group of financial institutions wants to implement a certain blockchain solution to their business scenario. The development and use of blockchain software products allow the banking group to operate in a closed pool without the likelihood of outside influence. By using such platforms, banks have confidence in those who have joined it. In case of errors, each transaction can be seen, but not changed.
New developments are designed to address pressing issues of transaction speed and security. So, the problem of settlement between legal entities is the time spent on the transaction. Sometimes this process can take up to three days, which is extremely long for small businesses and dynamic entrepreneurs.
The problem of the speed of payments is solved by the fact that transactions on the blockchain occur instantly. The only slowing factor may be the time that the receiving party will spend on confirming this transaction since they come from other network participants - PoW.
Banks have another problem today. Part of non-cash payments between counterparties is the transit of black money. It is difficult to determine this due to the absence of a chain of transactions and communication between companies, which isn't reflected in the movement of financial flows on other banks' accounts.
Banks are trying to implement different algorithms to identify them, but they are often mistaken, as there is not enough data for a full analysis. In turn, the blockchain network implies a single distributed transaction storage. This means that each payment will forever remain in a single base of funds movement. Therefore, the entire cash flow will always be available for analysis.
The security of transactions is ensured by the fact that the calculated checksum of the previous block is embedded in each data block. This allows you to get a link to the previous block, which excludes the possibility of fraud.
Future solutions based on the blockchain network will radically increase the transparency of transactions, and make procedures for verifying the origin of funds simple and efficient.
Article and video on the topic: Prospects For The Development Of Blockchain In The Field Of Finance.