With the continual fire of cryptocurrencies, a technology hidden behind it has become more and more eye-catching, and that is the blockchain that has been hotly debated.
If you are interested in this area, you will notice that almost all articles are talking about the decentralization of the blockchain. Indeed, decentralization is a very important feature of blockchain, but blockchain is not just decentralized. The potential of the blockchain is far more detailed and far-reaching than it is today.
In particular, the blockchain is not only decentralized, but in some cases, it can even ruin existing markets and participants. Of course, in some cases, blockchain can also reduce costs by reducing labor-intensive processes and eliminating duplication of effort.
The core value of the blockchain
The core potential of the blockchain lies in the nature of distributed databases and how they contribute to transparency, security and efficiency. In the past, organizations needed to use a central data repository to support transaction processes and calculations. Control over the data is in the hands of its owners, while the latter manages access to and updates to the database, which limits transparency and scalability, and prevents outsiders from ensuring that data is not manipulated.
Distributed databases are basically impossible to implement due to technical limitations. But with advances in software, communications, and encryption, a distributed database across organizations is now possible.
The transparent, efficient and secure nature of the blockchain makes it especially suitable for enterprises that are inefficiently dragged down and suitable for empowering new business models based on distributed markets and technologies. Of course, it should also be noted that blockchain is not a panacea, it is not a substitute for broken business processes.
Blockchain has a natural advantage on some issues
However, blockchains have a natural advantage when solving certain problems. For example, in the Internet of Things, it promotes multi-party security and decentralized transactions. Due to the nature of its decentralized nature of the books, the blockchain is particularly efficient for dealing with distributed transactions involving a particularly large number of parties. And, given a multi-party encryption validation and verification process, the blockchain provides a high level of security for each transaction.
The blockchain also has the characteristics of a distributed ledger, so all transactions on the blockchain are recorded in each member's ledger. And each transaction is encrypted separately, and such encryption is verified by other parties in the blockchain. Any attempt to tamper with or delete the transaction information will be detected by other parties and then corrected by other nodes. This also enhances security and mutual trust and reduces fraud.
In any transaction involving two or more adversaries in the capital market, transaction records are usually kept separately in separate systems. Each transaction requires an intermediate and a late-stage office system, so errors during this period can lead to expensive reconciliation processes and extensive manual intervention.
If a blockchain is used, both parties can get a smoother clearing and settlement process, shorten the settlement window, and avoid large capital and operating costs.
Blockchain application example
There are already many examples of blockchain applications, such as the popular P2P accommodation network such as Airbnb, which has begun to transform the entire hotel industry by building a public market for private properties. But development will be limited by concerns such as damage to the customer and the property of the homeowner.
In this case, a secure and anti-interference system can be constructed to manage the electronic certification information and reputation. The blockchain can help the development of the family P2P accommodation industry. Relevant institutions believe that by 2020, 30- A $9 billion incremental income opportunity.
In optimizing the liquidation and settlement of cash securities, the blockchain seems to be tailor-made for it. Although the transaction cost of securities such as equity is relatively low, up to 10% of transactions are subject to various errors, resulting in artificial intervention and extended transaction settlement time.
Through the application of blockchain technology to the clearing and settlement of advanced securities (especially equity, repurchase agreements and leveraged loans), through a shorter or even customized settlement window, some organizations expect that this industry worldwide will save 110-120 The cost of billions of dollars, including operating costs and capital expenditures. In addition, the blockchain has the potential to cut the extra cost of designing forex trading, commodities and OTC derivatives transactions.
The challenge of blockchain landing
At the moment, blockchain, like all new technologies, has many challenges in the face of real applications. For example, there is currently no accurate technical standard to ensure technical application between industries, especially when multiple blockchains are required to have interoperability.
The quality of a good blockchain database depends on the data and business processes that make up its foundation. If the link cannot be reached due to business conflicts, etc., the application of the blockchain will be greatly hindered or even impossible to develop. .
Of course, it should also be noted that although the blockchain has the concept of distributed data, there is a premise that both parties are willing to share information with their opponents. Moreover, this concept of “reputation management†can also lead to concerns about the impact of permanent reputation, which requires careful consideration.
There is also a blockchain distributed data that will be slower than a centralized database, which is naturally determined, so whether the blockchain is suitable for high-speed, high-capacity applications, so it is still a commercial application for this aspect. problem.
summary
The blockchain is an epoch-making technology, no doubt, but at the same time, the blockchain is not so magical. The value of the blockchain is not only decentralized, it is essentially a distributed ledger, a technology created to build trust between the two parties.
The blockchain is still in the exploratory stage. In addition to the cryptocurrency that has been mad, the application in other fields is more worthy of expectation. I also hope to see the commercialization of the blockchain as soon as possible. At that time, I believe that the entire market has undergone revolutionary changes.
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