By now the International tech community is quite sure that Blockchain has emerged as the most important tech innovation of recent years. It has already brought a quite seismic range of changes in the tech world starting from the new ways of fraud control in financial institutions and banks to making digitization of retail, manufacturing and service sector better with unrestrained and easier data access.
The journey of Blockchain was started with Bitcoin, the first cryptocurrency in the market. The decentralised data ledger of Blockchain that powered Bitcoin and many other digital currencies in the subsequent time was quickly embraced by banking and financial sector to secure their business processes and transactions. But digital currencies only served as the starting point for the technology, and in the subsequent time, it was embraced by several other industries and businesses to provide the ultimate solution to the concerns of accessibility and security.
It is important to have a comprehensive view of the entire evolution of Blockchain technology over the years. Here we are going to explain the entire path of this evolution along with the hidden potential of the technology in curbing many threats that the world has suffered from and the emerging challenges and some unanswered questions that the Blockchain developers have to answer in the time to come.
Blockchain technology for establishing trust
For a long time, a common problem that pained many financial institutions in the absence of a credible platform that allows communication among a number of incompatible databases. To make databases communicating and reconciling with each other a time to consume, the complicated and expensive endeavour is required. But in spite of that, the common flaws across multiple databases cannot be eliminated conclusively with traditional procedures of checks and balances.
This is where the promise of Blockchain seems to be huge and really unputdownable. Blockchain as the distributed data ledger system can minimise the lifecycle of the trade to a minimum by holding together the entire streaming financial data sourced through different transaction windows and interfaces.
The problem of incompatible database systems became a thing of the past with the coming of Blockchain technology. Apart from establishing trust in the process which will positively impact the credibility of banks and financial institutions, Blockchain technology will also help banks saving at least $15–20 billion every year by minimising the costs incurred through regulatory methods and settlement.
Blockchain in preventing significant financial crisis situations
To the surprise of many, Blockchain could indeed prevent the financial crisis that gripped the world in 2008 and made many people jobless besides straining the economy of too many countries all over the globe. Simply the distributed data system of Blockchain could make vital financial data available for many stakeholders in the financial and real estate chain for a better and more precise assessment of the situation, and that could have alone prevented the huge financial debacle that the economy faced mainly because of the panic that ensued.
Let us explain the situation in more details. The distributed ledger technologies pertaining to Blockchain could equip bankers to evaluate the portfolios of the real estate mortgages and their value in real time and take appropriate measure. This could have alerted the financial managers about swapping counterparties and thereby derision of the mortgage value. This could further equip them taking measures to make up for the loss of valuation much earlier before the situation could go out of control ending up in a major financial breakdown.
Such possible implications seem to be huge for the economy and truly promising for the general life and society in the time to come. Distributed data ledger system can forever become the preventive mechanism to shield mortgages and assets of financial institutions from losing value due to market volatility. Though it seems to be far receded in the future, the distributed ledger system with its real-time accessibility of data can also equip the share market investors of the future to shield their investments from several risk factors erupted out of unavailability of information.
The Four Major Things Missing in the Blockchain Industry
Now, from the starting point to the present potential of the Blockchain technology in comparison to the past has already been envisaged by the experts worldwide. What it can do and what it could have achieved we can already figure out. But most of us seem to be largely unaware of the biggest issues that are still holding back the Blockchain technology from delivering up to its optimum potential or promise. Here we have picked up four such points and explained them in brief.
1. Blockchain infrastructure: absence of any comprehensive interface
For most people including many policymakers who sit at the helm of various organisations Blockchain still seems to be a lot confusing and shrouded in mystery just because they cannot make use of the technology readily through a knowledge wallet or an interface that boosts exchange of information through the distributed ledger system of Blockchain. The Blockchain developers must develop a consistent user experience that can satisfy users without any deeper understanding of the cryptocurrencies and Blockchain technology.
2. The decentralised ledger still depends on centralised Solution for scalability, liquidity and exchange
With the first issue addressed by a standardised user experience for the Blockchain interfaces, there will be more demands of scalability and faster liquidation of virtual assets. But, when it is about addressing these issues such as scaling up the capability to address more users or accommodate more transactions, the Blockchain system still depends on a highly centralised system. Moreover, control of assets like cryptocurrencies is still centralised, and there is a growing need for liquidating virtual currencies to allow all users the same kind of accessibility.
3. The conversion of digital assets into real ones
Blockchain has offered us amassing digital wealth in the form of cryptocurrencies, and the very heart of this system is dominated by the exchange of wealth rather than conversion just as in the case of regular currencies. Now, this only happens because the cryptocurrencies go through a rigorous process of verification involving several complicated steps. In the time to come, Blockchain will be smarter enough to allow quick transfer of value from digital wealth to real life values. At present, this conversion of digital assets to real life wealth remained an unanswered challenge largely.
4. A stable and functional coin
The last major issue about Blockchain based assets is the tremendous volatility that they accompany. On the one hand, such volatility of wealth value is a constant concern with Blockchain powered currencies; their functional character in being utilised extensively for various purposes is a big challenge.
The blockchain is already observing the midday-sun of its popularity surpassing all other contemporary technologies and buzzwords. But while the promise is obvious to make you feel overwhelmingly optimistic about it, the technology still seems to have several issues unresolved.