Blockchain the cost and time of third party

Blockchain was firstlyintroduced in October 2008 as the original source code for virtual currency system,bitcoin. It is the initial application of blockchain as a transformativetechnology. Subsequently, code was transferred as an open source code in January2009. Since then blockchain is rapidly growing as a disruptive technology,which has the ability to replace the traditional models due to its uniquecharacteristics – high accountability and low-cost. Blockchainis a continuous list of growing records which use cryptography to link andsecure records which are called blocks.

Every block contains a hash of theprevious block and it builds a chain of blocks initiating from the genesis block(first block) to the current block. Mechanism of blockchain assures each block followschronological order or else, the previous block hash would be unknown.Therefore, it is built as a linked chain of blocks. Any modification to eachblock should be supported with the regeneration of previously connectedrecords. In consequence, blockchain has become an incorruptible digital ledgerof economic transactions that can be automatically programmed to virtuallyrecord everything of value in a verifiable and permanent way.

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                                     Figure01.   Formation of Blocks                        (Black- series of blocks from the genesis block to current block                          Blue – orphan blocks exist outside the mainchain) In a blockchain system,ledger is replicated in a large number of identical databases, where each is maintainedand hosted by an interested party. When transactions occur, records of valuesare permanently entered in all ledgers. It eliminates the cost and time ofthird party intermediaries to verify or transfer the ownership of assets.In addition, everyprocess, task, and payment in a Blockchain is supported by a digital record asit is done by identifying, validating, storing and sharing records on a public ledger.This mechanism is to ensure the highest degree of accountability andtransparency of the system. It eliminates the human and machine errors andcertify transactions in a much more efficient, faster and transparent way.Furthermore, it safeguards its record from potential hacking and manipulationthreats by operating as a decentralized version of a database.

                                                              Figure 02 Modern world tech giantssuch as Microsoft, Intel and IBM has made significant investments on thisrevolutionary technology. For instance, IBM dedicates $200 million and 1000employees to support the blockchain powered projects. It predicts that theglobal market for blockchain is expected to be worth $20 billion by 2024.

MajorEuropean and American banks such as J.P Morgan Chase, Citigroup and Bank ofEngland are exploring Blockchain solutions to facilitate their transactions. Atpresent, Blockchains are mainly integrate into systems of keeping track ofcredit default swaps of financial institutes. In near future, Blockchain hasthe potential of disrupting the entire financial and banking industry and it isestimated that banks could save $8-12 billion annually via adopting blockchaintechnology.

At present, Evolution ofthe blockchain protocol has widen the scope of the adaptability of thetechnology for different industries. Nowadays, tech savvy Law firms useBlockchains to provide multi signature account services for asset protection,estate planning and dispute resolution by using a public ledger. An applicationcalled OpenBazaar uses blockchain to create a peer to peer eBay transactions byenabling peer to peer payments and direct interaction between parties withoutintermediaries.

Furthermore, the blockchains could be effectively integratedinto stock trading. There is a potential for added efficiency in sharesettlement. For instance, LinQ Company, in partnership with blockchain startup,Chain, initiated its first share trade powered by Blockchain technology wheretransections are settled within seconds, securely and verifiably. Moreover,blockchain can be effectively integrated into supply chain auditing andgovernance. Provenance Brands, a UK company has recently commenced a pilotproject by using Blockchain to ensure that fish sold in restaurants in Japanhad been sustainably made available and supplied by Indonesian suppliers.Blockchain’s distributed ledgers provide easy access to certify that the supplyprocess is in line to the established standards. All these applications ofblockchain technology would ease up the process of leading the world to asharing economy by eliminating intermediaries and generating real value for allparticipants.

 No matter what thecontext, the impact of Blockchain is still at infancy. Experts are of theopinion that, in terms of development, Blockchain is currently in the positionwhere the internet was in 20 years ago. It will take decades for blockchain technologyto adapt into the social and economic mechanisms of the world. Currently, it isrecorded that only 0.5% of the world’s population has adapted Blockchain.

Therefore, continuous development and a good template to adaption is vital tospeed up the pace of implementation of Blockchain as a primary technology. Itis certain that the Blockchain will create new foundations for our social andeconomic infrastructure. But the very big question is when. 

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