What is so powerful about Blockchain technology?
There are several intrinsic features of a Blockchain that lend it its power and allows it to record and transfer value over the internet in a peer-to-peer manner:
- Near real time: It enables near real time settlement of recorded transactions, removing friction, and reducing risk
- No intermediary: It is based on cryptographic proof, allowing any two parties to transact directly with each other, without the need for a trusted third party.
- Distributed ledger: The peer-to-peer distributed network records a public history of transactions, making Blockchain distributed and highly available.
- Irreversibility: It contains certain and verifiable record of every single transaction ever made that cannot be altered without altering the entire chain. This prevents double spending, fraud, abuse, and manipulation of transactions.
- Censorship resistant: Crypto economics ensures that Blockchain continues pumping out new blocks and that blocks are not being reverted or altered.
The Gartner hype cycle puts Blockchain technology just below the peak of expectations, which means that experts still see another 18-24 months before this technology becomes main stream. Most industry experts and pundits concur, but would rather see it moving quickly beyond proof of concepts (POCs) into production sooner rather than later. While significant investments have already been made into the Blockchain ecosystem, a lot still needs to be seen. Several companies have done POCs globally, with financial services industry leading the way. The leading global banks have been actively working together in the Global Blockchain consortium R3, which is a consortium partnership of over 80 of leading financial institutions and regulators led by R3, a distributed ledger technology firm. There are several uses cases around global money movements (payments and remittances), trade finance, digital identity, smart contracts, and several others that have been established and leading firms are investigating into.