Businesses on the Internet act as trusted third parties to process electronic payments. Almost entirely dependent on financial resources. Although this system works for most transactions quite well for, but it still lacks the inherent trust-based model There are weaknesses. No. Completely irreversible transactions are not feasible in practice because financial institutions may encounter arbitration disputes that necessitate intervention.
The minimum practical cost of arbitrage transaction By limiting the size and eliminating the possibility of small random transactions, Drives up costs, and losing the ability to make non-transferable payments for non-transferable services Extensive costs are incurred. The need for trust increases with the possibility of a decision. To businessmen, One has to be careful with their customers and harass them by asking for more information.
Which they would not have needed otherwise. Some percentage of fraud is considered inevitable. Underground These costs and payment uncertainties can be avoided privately by using money,
But there is no mechanism to make payment through any communication channel without your trusted party.
What is blockchain?
Blockchain is a technology through which cryptocurrencies such as Bitcoin and Tron operate. Simply put, it functions as a digital ‘public ledger,’ where every transaction is meticulously documented.
Once a transaction is logged on the blockchain, it becomes permanent and cannot be erased or changed.
It should be noted that due to Blockchain, a trusted third party such as a bank is not required for transactions.
At present, transactions are done in banks only by directly connecting with customers and suppliers.
Under this, the details of each transaction are recorded in the ledger after being verified by devices connected to the network (mainly a series of computers, called nodes). Blockchain can also be compared to the situation of the Internet in the year 1990.
Recently, Software Metastock also announced that they would provide an update to their software-related bitcoin.
It is noteworthy that in the last two decades, ‘The Internet of Information’ has changed our society. Also, we are now entering an era where Blockchain will also be able to perform the same function through ‘The Internet of Trust’ and ‘The Internet of Value’.
How did it originate?
Nothing has been clearly stated regarding the origin of this technology, but it is believed that a group of people created the pseudonym Satoshi Nakamoto, the person who invented Bitcoin, created the cryptocurrency. Invented this technology to support.
Share Market vs. Bitcoin
The best investor, Warren Buffet, doesn’t trust this technology. His thoughts are based on the price against value, and Bitcoin does not contain any value except its demand.
Indian investor Radhakishan Damani is also not interested in investing in Bitcoin. But he never makes any comments against this technology, so you can say that his point of view is neutral.
importance of technology
Bitcoin is just one application of this technology, the use of which is being investigated in several industries. There is a lot of attraction towards it in the banking and insurance sector of India. Many people in these sectors are forming consortia so that they can make the world aware of the benefits of blockchain technology at an industry level.
For example, in India, there is a consortium called ‘BankChain’ which includes about 27 banks in India (including State Bank of India and ICICI) and nations from the Middle East as its members.
The association is widely spreading the benefits of blockchain technology to make businesses safer and faster. The Institute for Development and Research in Banking Technology (IDRBT), a subsidiary of the Reserve Bank of India, is working on developing a cutting-edge platform for blockchain technology.
What are its benefits?
The benefits of using blockchain will vary for all transactions. According to Deloitte and ASSOCHAM, blockchain will prove to be more beneficial when the data is large and has to be shared among many people and there is no feeling of trust among them.
Financial investors will benefit the most from this technology.
According to a study conducted by the World Economic Forum, more than 90 central banks around the world are involved in the blockchain discussion. Apart from this, 2,500 patents have been filed for this in the last three years.
80% of banks are also predicted to introduce blockchain by the end of 2017. This new technology will emerge as a ray of hope in the field of financial services.
Even those in non-banking sectors (such as retail, travel, healthcare, telecommunications, and public sector industries) are paying attention to the opportunities offered by blockchain. It is worth noting that this technology will only apply to industries that focus on decentralized data storage, data immutability, and distributed ownership features of blockchain.
Situation of India
A high-level committee comprising officials from the ministries of finance, home, and information technology, as well as SEBI, the Reserve Bank of India, the State Bank, and NITI Aayog, is debating whether cryptocurrencies should be banned in India or not.
However, the discussions held so far have confirmed that the committee has expressed its intention to promote the use of blockchain technology.
conclusion
Blockchain technology is expected to enhance the efficiency of various types of transactions by eliminating intermediaries, which will also lower transaction costs. Additionally, this technology will increase transparency and help eliminate fraudulent transactions, as each transaction will be recorded and assigned to a public ledger.
