4 Reasons Why Blockchain is our Future

Image by Markus Spiske on Unsplash

Cryptocurrencies have been the most talked-about innovation in the 2020 pandemic. Sadly, they’re often brutally confused with the founding blockchain technology.

And although currencies like Bitcoin have been here for a while, we’re just beginning to grasp blockchain’s far-reaching potential as a digital ledger.

Right this second, there’s someone out somewhere creating a blockchain that will one day be a solution. It will be a solution to traditionally flawed governments, business models, contracts, and virtually for any and all industries. According to Report Linker, we can expect the global blockchain market size will grow from $1.06 billion in 2020 to $10.45 billion by 2025.

What is Blockchain?

Blockchain allows for a direct peer-to-peer exchange of information and value. Thus, by immaculately combining the perks of both the internet and cryptography, it eliminates the need for a middleman.

Ultimately with blockchain, one can imagine a world where information is then stored and can in no way be changed, hacked, or even erased from the system.

Interestingly, all this has been achievable because blockchain works as a decentralized system. Hence, not one but virtually anyone can access the data on the computers. And this duplication across networks is regularly updated, auditing every transaction taking place for all its users.

Likewise, companies or individuals can view previously recorded entries and build up new ones in what we refer to as blocks. Each block is tenaciously connected to a previous one by a hashing function, which again is impossible to change. It is what gives cryptocurrencies power over nationally centralized currencies.

How is the Future Shaping Up?

Evidently, we are likely to encounter blockchain technology a lot in the future since more and more companies are driving towards greater transparency. Let’s look at some of the progressing ways companies are planning on harnessing the blockchain’s potency in the next decade:

  1. Cross-Border Payments
Image by Pascal Bernardon on Unsplash

The fact is that international transfers and payments are both slow and expensive, with days of delays and multiple bank involvements. Banks then also cap off commissions from all the currency conversions. Now there are institutes to help fasten this process, but they too charge a hefty fee. There is no winning until now.

Blockchain technology is the answer to cheaper, faster, and uninterrupted cross-border payments with unaltered, raw data at few clicks. In 2021, most money remittances can cost an average of 6.38% of the transfer amount. Blockchain would, however, cost you a minuscule of that amount.

Despite all that, to be accepted as a stable means of monetary exchange, cryptocurrencies will first have to overcome the challenge of skepticism it is facing from the world.

2. Smart Contracts

Smart contracts may be the most revolutionary application of blockchains today. Its implications here are so intriguing. Firms revolve around contracts — a trusted document that ensures buyer-supplier and employer-employee relationships. Such contracts are most of the time subjected to inconsistencies, dirty politics, and bureaucracies.

On the other hand, smart contracts propose secure, automated payments and the transfer of currencies and assets after you meet the conditions. In its essence, it will be self-enforcing and self-executing at the same time.

And we are already beginning to see the effects of smart contracts in industries like venture funding, banking, and digital rights management.

3. Identity Management

If there is one thing that internet users have exploited the most is identity security. As much as companies and individuals have ventured into securing their private online information, none has succeeded in total anonymity. There, always, are nefarious people and hackers trying to dig up and steal delicate data to make a profit off of them.

We are now in more need than ever for blockchain and its already established level of security through independent verification processes. It works by aggressively verifying all the member computers on its network before approving a transaction block to the chain. This method is readily applicable to any other verification procedure, including the voting process.

4. Supply and Drop Chains

All industries depend on successful supply and drop chains. There has to be an organization of data and a harmonious way to track shipments. It gets interesting here because blockchain brings out a new approach to supply chains.

It would mean commerce without any human error or inaccuracies from complex distribution points. It would serve as a means of keeping tabs on consignments, the potential for various industry crossovers, and direct involvement of digital currency space.

Wrapping Up

At its core, blockchain is simply a chain of publicly accessible records stored in the form of blocks and controlled by no one authority. However, this system is also the answer to almost all the technological, human, environmental, and even infrastructural issues. It is an atom of an idea that can transform countless industries that stand to benefit from its integrations.

Say what you want about cryptocurrencies, but the blockchain is here to stay, for sure. It is a good idea that you familiarize yourself with its potential and workarounds before it takes you by storm.

I come from a background of lifelong love for words and logics. I love coffee more than I should. And I strive to understand the whys and the hows of the world.

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Areeba Tejani

Areeba Tejani

I come from a background of lifelong love for words and logics. I love coffee more than I should. And I strive to understand the whys and the hows of the world.

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