If you keep up with the news to any reasonable degree, you have undoubtedly heard of blockchain technology. As one of the most impactful developments in the fintech space in recent years, blockchain aims to revolutionize the way data is recorded, stored, and transferred.
How will this new technology continue to influence finance and other industries? Here’s a deep dive on what exactly makes blockchain special, and where you can expect to see it making waves in the coming years.
What Is Blockchain?
At the simplest level, blockchain technology is a method used to store and transfer data. Unlike many storage methods that organize data into tables, however, the blockchain is made up of individual “blocks” of data. Once a block is full, it is linked to all other previous blocks in a secure manner, thus creating a “chain.”
This hypothetically endless string of data becomes a chronological record which cannot be tampered with once solidified within the chain. The entire dataset is visible to the user at any time, coupling security with transparency of use. Furthermore, the entire blockchain is continually verified by each computer using the blockchain network: if one user attempts to alter an existing transaction in the chain, all other users will recognize the issue and correct it.
As the technology of blockchain continues to mature and grow, the applications for it are vast. As you might know, one of the applications that has brought blockchain to the forefront of the public eye is cryptocurrency.
These digital currencies offer a new and more secure way to transfer funds, because the transaction history and data of the interacting parties is all encrypted and permanently cemented within the blockchain. New cryptocurrencies pop up every day, and in 2021 average investors with little to no experience found themselves getting involved in the frenzy.
Outside of crypto, blockchain has enormous ramifications for the larger financial industry as well. Providing a safer and faster way to both store data and transfer funds – two of the most important endeavors of many financial corporations – blockchain looks to be a major tool in the arsenal of financial institutions in the coming years.
It is the data storage and transfer capabilities of blockchain that also open seemingly endless opportunities for its technology to be utilized in a number of industries. In healthcare, for example, blockchain would offer a way to confidentially sync a patient’s medical history, prescriptions, and other health data between various medical practitioners and pharmacists. Because medical data is so sensitive, the added security of blockchain data storage is a major plus.
It is easy to see why the tech industry is so eager to embrace this burgeoning new technology – one can imagine applications for its use in any industry that deals with data transfer and storage, such as shipping, insurance, software development, education, and so on.
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