Simplifying and Re-defining Blockchain Technology

The purpose of this article is to briefly explaining and re-defining the objective of the blockchain technology. However, i also think that explaining the origin of the blockchain technology would help us to gain a deeper understanding.

Most of the computer scientists and software engineers know that a system should be efficient, reliable and secure as well as cost-effective for conducting and recording transactions.

Throughout history, instruments of trust, such as minted coins, paper money, letters of credit, and banking systems, have emerged to facilitate the exchange of value and protect both parties.

Important innovations, including telephone lines, credit card systems, the Internet, and mobile technologies have improved the convenience, speed, and efficiency of transactions while shrinking and sometimes virtually eliminating the distance between buyers and sellers. Still, many business transactions remain inefficient, expensive, and vulnerable, suffering from the following limitations;

• Cash is useful only in local transactions and in relatively small amounts. 
• The time between transaction and settlement can be long. 
• Duplication of effort and the need for third-party validation and/or the presence of intermediaries add to the inefficiencies.
• Fraud, cyberattacks, and even simple mistakes add to the cost and complexity of doing business, and they expose all participants in the network to risk if a central system, such as a bank, is compromised. 
• Credit card organizations have essentially created walled gardens with a high price of entry. Merchants must pay the high costs of on-boarding, which often involves considerable paperwork and a time-consuming vetting process. 
• Half of the people in the world don’t have access to a bank account and have had to develop parallel payment systems to conduct transactions.

Transaction volumes worldwide are growing exponentially and will surely magnify the complexities, vulnerabilities, inefficiencies, and costs of current transaction systems. The growth of e-commerce, online banking, and in-app purchases, and the increasing mobility of people around the world have fueled the growth of transaction volumes. And transaction volumes will explode with the rise of Internet of Things (IoT) — autonomous objects, such as refrigerators that buy groceries when supplies are running low and cars that deliver themselves to your door, stopping for fuel along the way. To address these challenges and others, the world needs payment networks that are fast and that provide a mechanism that establishes trust, requires no specialized equipment, has no chargebacks or monthly fees, and provides a collective bookkeeping solution for ensuring transparency and trust.

Going back to explanation, blockchain is a shared, distributed ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible — a house, a car, cash, land  — or intangible like intellectual property, such as patents, copyrights, or branding. Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved. 

Basically, blockchain, most simply defined as a shared, immutable ledger, has the potential to be the technology that redefines those processes and many others. Blockchain allows increased trust and efficiency in the exchange of almost anything.

Although, there are some down sides of this technology such as transactions are irreversible, hacks and manipulation still occur and more transactions happen, the system generates more nodes and this would create time delay during the decrypting the chains.

As a team, we are still looking forward to figure out whether this technology is perfect fit for our system.