What is it? Its official description is that “Blockchain is the world’s leading software platform for digital assets.” In layman’s terms, it’s essentially a modern-era/futuristic general ledger. For those who don’t know, a general ledger is usually used to keep track of transactions between parties, that involves things of value, i.e. cars, cash, stocks, corn, etc.
Usually, the transaction process involves a 3rd party or middleman, who does not gain anything from the transaction, they exist simply to ensure that the transaction is kosher in case future arguments about said transaction occur.
Blockchain, will essentially eliminate this middleman, instead making the ledger public and widely shared across a peer-to-peer network, with each member contributing and journaling transactions to this digital ledger
Currently, Blockchain is predominantly the technology reinforcing the Bitcoin Cryptocurrency. Bitcoin is an alternative to government flat currencies and can be used in everyday purchases. According to a Tech briefing from ISACA, “The Society for Worldwide Interbank Financial Telecommunication (SWIFT) network has taken notice of Bitcoin’s growing popularity for fund transfers outside of traditional banking infrastructure and is currently piloting a Blockchain-based system to reconcile and ledger interbank transfers in real time. This approach could ultimately replace traditional automated clearinghouse (ACH) clearing processes.”
Blockchain would also lower operations cost, approx. 30 %, due to the elimination of the costs that are usually associated with journaling transactions for business records and compliance purposes. Blockchain also eliminates the 3 business days that clearinghouses usually take to settle transactions.
Some Canadian banks are collaborating with IBM to leverage the company’s Blockchain in order to validate various aspects of a user’s identity. Blockchain has also been proposed as a way to confirm the accuracy and integrity of Electronic Health Records
And like any new technology, there are risks involved as well. Since it’s an emerging technology, it has only had a few large-scale transactions. So the limitations as to what Blockchain can and cannot do on the scale of hundreds of millions transactions that the global market experiences throughout the course of a day, are still unknown. Other risks include security risks, such as access control, encryption and potential vulnerabilities to denial of services
On their website, Blockchain provides quite a few statistics regarding Blockchain and its use: Over 14 million wallets, 140 countries served, 160,000 daily transactions, to state a few. The service offers several security features. In addition to a password, you can also add telephone and email verification for 2FA as well as Google Authenticator for a third type of 2FA. Pin Codes and secure phrases are also available to secure your account.
Given the increased focus on digital currency and the increased cyberthreats, the use of the Blockchain technology looks to be a significant player in the digital currency and payment marketplace
Article compiled by Mitchell Naden.