We see how Blockchain technology could not only agitate financial services, but other sectors such as security and even civil registries will also be positively affected. It is imminent how financial transactions could be transformed with this technology in a substantial way, that even cash could leave its existence as a means of commercial exchange, in perhaps a decade at the most.
What is blockchain?
The blockchain also called trust technology. We start that the procedures that today are daily and routine, such as requesting an identity card, requesting a credit, which constitute a headache, that would be a thing of the past, since with Blockchain technology it is proposed to eliminate and without intermediaries, automating all these processes, making them efficient, fast and reliable.
This allows us to give a definition of what would be the Blockchain as a kind of accounting system, as a collaborative record or as a system where all transactions are stored, which is decentralized as if it were a database that is shared with all the actors that are involved in the process. The difference with a common database is that its computer protocol legitimizes fairness, the veracity of information and transparency, in such a way that there is no need for intermediaries.
How do transactions in Blockchain work?
The applicant can examine the data requested directly from the source or the institution that owns the data. As an example, if a bank wishes to know the financial and fiscal history of a client, with the permission of the client itself, you enter the tax system directly and obtain the desired data.
When talking about eliminating intermediaries, it does not mean that official institutions such as banks and state organizations will disappear, on the contrary, with this technology they will be strengthened by facilitating access to the data they require. Blockchain goes a little further, since in addition to sharing information online, it also allows you to exchange the value without the need for the intermediation of a trusted entity that validates the transaction.
Another example, in online purchases no intermediary is required, since the money is charged directly. It can also be applied for property titles, certificates, files and any digital asset. Digital assets are understood as a resource that is available on the Internet, on the Internet, they are owned and used. They are treated as properties, as they can be negotiated for sale, purchase or licensed.
Example of the operation of blockchain technology
In the previous article entitled What is Blockchain technology?, It is explained more broadly what concerns this technology. A blockchain works in a relatively simple way, in which more than two people participate: person A and B are no longer alone, they are part of a large group of users who are responsible for verifying that the whole process occurs which should it be The process is as follows:
A wants to send money to B, The transaction is represented in the network as a block, this block is transmitted to all the components of the network, the network components approve the transaction giving it validity, the block can already be added to the chain, providing an indelible and transparent record of all transactions, finally, money moves from A to B.
That is to say, if A wants to withdraw a Bitcoin from his account to give it to B, the first thing he must do is notify everyone, with a caveat that nobody knows who A is and who is B, only known of the existence from a digital wallet, what would be a bank account, that wants to spend money from one account to another account that is known.
A notifies you of your intention without revealing your identity, in order to update the account books, in this way, users first verify that that account has the money to be transferred to the B account, if positive, all write down the transaction that is going to be completed and is already part of the block of transactions, although they are not yet definitively registered in the database. As time goes by and more transactions are made and moving to that block, which has a limited capacity, it will depend on the structure of the blockchain and the size of the transaction. When the time comes when the block does not accept more transactions, it is then the moment of validity or seal, which is what users do when they are doing mining.
What do you think about this topic? Do you think that financial transactions are carried out without intermediaries?
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