Let’s suppose you owe 10$ to a friend and that you opt for a bank transfer rather than cashback. Depending on your banking conditions, the transfer may arrive up to 3 days after you’ve sent it. This time is over. Welcome to the blockchain era! Blockchain? What is blockchain?
Quick reminder below.
You’ve probably heard about it, but you never really understood what blockchain stands for. It may seem intricate, but trust me, it’s not that hard to grasp, even though summing up this concept is ambitious.
A blockchain is, as the word implies, a chain of blocks, that is to say a technical process allowing its users to send and share value remotely (like 10 USD for example), and so without any intermediary (like banks).
To make it more simple, blocks can be defined as a blend of large amounts of data. Let’s take a precise example. Let’s say that you want to transfer money to your friend. To be completed, the transaction requires information, such as your name, the amount transferred, the recipient and so on. All these data can be stored in a unique repository, called a block.
Ok but what’s the point of a block then? Nowadays, when you want to transfer money, you must ask your bank first. Then the transfer will be done next. Well, blockchain allows you to transfer value immediately and without any intermediary’s help, that is to say for free and anywhere in the world, as long as there are users. If on the one hand the internet allowed people to share any information, blockchain on the other hand allows us to share whatever value. If you want to know more about how blockchain works, check this.
Everybody agrees to say that blockchain is the new technological revolution governments must get hold of. Indeed, this breakthrough would allow any company in the world, in Least Developed Countries (LDCs) for instance, to raise funds more easily than asking a bank, which is impossible in many areas. In other words, blockchain will stir economic development, and will allow a real fair allocation of value. Who said processing data was a waste of time, eh?
However, underneath that breath-taking promising technology, blockchain is based on a vaciliant ground. Trust.
The blockchain is well too unknown today to become commonplace. And also, banks still have a much bigger influence, for they are more considered as trustworthy. What really makes the strength of the blockchain is likewise its weakness: the lack of an intermediary. If there is no middleman to monitor the authenticity of each block of data, then how can people rely on what they are buying or receiving? Who utters data? How reliable are they?
The blockchain appeared in 2008 with the cryptocurrency Bitcoin. In the blockchain process, the Bitcoin is called a token. It is the support of the value one transfers, and is shareable instantly on online platforms. The owner of a token is granted access to the use of the token. So for example, if the token is a Bitcoin, its user could spend it, if the token is a Golem, its user could buy informatic calculation power etc.
To be definitely acknowledged as a real currency, people must put their faith in the Bitcoin, and be sure they can make any transactions with it. Yet you can find over 3 500 Bitcoin ATMs in the world, it is still hard to find places that accept that currency.
Therefore, as long as the blockchain is not unanimously considered as safe, it cannot open up.