Industries and Blockchain
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In fact, the Bitcoin (which is the first Blockchain system) saw astronomical returns of over 1,300 percent in 2017.
In 2017, Blockchain technology is very important for big companies in different sectors. In 2017, the New York Stock Exchange (NYSE) filed for two Bitcoin Exchange-Traded Fund (ETFs) with the Securities and Exchange Commissions (SEC), the Chicago Board Options Exchange (CBOE) became the first institutional investor to launch a Bitcoin futures market and Chicago Mercantile Exchange (CME) group followed suit a week later doing the same. Indeed, there are large exchanges and a multitude of industries that plan to use Blockchain technology.
In 2017, the Commodity Futures Trading Commission (CTFC) launched a Primer on Virtual Currencies. Indeed, Blockchain technology can be used by governments, financial institutions and cross-industries to optimize everyday operations.
Blockchain technology can be used as a cryptocurrency as Bitcoin. This cryptocurrency is used as a store of value, in trading and payment transactions, and to transfer and move cryptocurrency either domestically or international at a faster speed and a lower cost than the traditional financial institution or intermediary is able to.
Blockchain technology has many advantages such as cost-cutting, security enhancing, speed enhancing capabilities.
A Blockchain system is a distributed ledger secured by a cryptographic proof of work/stake. In a blockchain, all the transactions are recorded on a digital ledger. Furthermore, a set of transactions is called “block”. These blocks are linked to their previous blocks. In order to make a transaction, you have to pay with gas (which has a cost in cryptocurrency such as Bitcoin). Furthermore, these transactions are verified by miners, which are rewarded with cryptocurrency if they solve complex “puzzles”, which are algorithms that encrypt the transaction data. Then, when the transaction is verified, it is added to the chain, and a copy of the updated ledger (which has the new block) is broadcasted to the other nodes. But if an updated ledger is broadcasted that a majority of the nodes on the network are not in consensus with then a node will not update to retain that copy of the ledger because it is not a truthful and honest representation of the transaction data. When someone wants to make a transaction (or hack the ledger), the miners of this block and its previous blocks must verify this transaction. This is the reason it is called distributed because there are many miners verifying. The bigger the blockchain, the harder it is to hack the system.
The cryptographically secured Blockchain and the system of node consensus are more secure than the current system of centralized record.
The blockchain is an Emerging solution for fraud prevention. Using blockchain technology, it is very hard to alter or delete information in the blockchain.
For example, in industries like accounting where human workers handle tasks (like verifying records and confirming the truthfulness of transactions), it is possible that human error or people that want to manipulate records or create fraudulent records.
Indeed, record-keeping industries such as accounting industry plan to use Blockchain technology. The Blockchain network is secured by cryptography and verified by a network of computers. So, Blockchain technology allows a nearly tamper-proof record to be created and allows people to transact P2P without having to put their trust in a middleman.
In fact, blockchain technology allows business operations to take place without the use of a middleman (such as banks). Actually, a middleman service it’s an extra cost for businesses.
For example, when workers carry out operational tasks for business, the business must pay costs such as renting infrastructure, electric, gas, and the water expense concurrent with operating infrastructure, employees salaries, paper for printers, etc. Indeed, using blockchain technology, it is possible to save middleman costs, so it is possible for a business to become more economically efficient.
Indeed, Blockchain technology could reduce the number of human workers needed, reducing salary costs, eliminating the need for a business to own/rent and operate infrastructure, and having a digital ledger that is less susceptible to fraud and manipulation.
In 2017, we saw how Blockchain technology changes the way that businesses raise capital.
An Initial Coin Offering (ICO) is a method of crowdfunding a business can use to raise capital by selling the right of ownership or royalties to a project to investors. There are Initial Public Offerings (IPOs) in which businesses raise capital by selling shares of ownership in the company to investors. Actually, it is easier for a company to launch an Initial Coin Offering than an Initial Public Offerings. So, startups are attracted to Initial Coin Offerings and give Blockchain technology the ability to change the process of raising capital.
So, in order to launch an Initial Coin Offering, a company must bring the project to a respectable technological checkpoint, publish a white-paper, and announce the token-sale date. Actually, no underwriting or government approval needed.
In the case of an Initial Public Offerings (IPOs), an investment bank underwrites a business, then files with the Securities-and-Exchange-Commission (SEC) and then has to wait for the Securities-and-Exchange-Commission (SEC) to evaluate their business before the Securities-and-Exchange-Commission (SEC) finally announce an Initial-Public-Offering date for the company.
Companies want to use blockchain for having digital ledgers, become more efficient, and cut costs.
Furthermore, businesses and governments plan to use Blockchain technology because it seems to be leading the corporate world into the digitized future.
Blockchain technology is attractive because of: its economical efficiency, increased transaction speed and cryptographically secure.
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