When you talk about the future of money, you should think about the potential of the Blockchain technology. The word “blockchain” is short for “blockchain ledger”. Basically, this technology is the backbone of the modern financial market. Think about it, banks use blockchains to keep their books. Companies use blockchains to make sure they are able to track their assets and account for them in real-time. Even governments use blockchains for important decisions.
At this point, you might be asking, what is the most important function of the Blockchain? Is it simply a way to record and track real-time transactions? Or, is it the most important characteristic of the Blockchain that should excite you as an investor and potential customer? In general, the most important characteristic of the Blockchain is its underlying distributed ledger system. This underlying system includes three distinct features:
Distributed Ledger System: The Blockchain ledger consists of four different layers. First, the network layer, which is the collection of user-supplied data and transactions that occur between peers in the network. Second, the network layer holds the public key infrastructure (PKI) keys that are required to access the private key infrastructure (PKI) held by the decentralized trust authorities (Diaries). The final layer, called the Fabricated Ledger, is an interface layer that connects the different layers together using standard data communication protocols. By keeping all these four layers in place, you can be assured that all the different transaction processes are recorded, tracked, and reported correctly and instantly.
Built-in Distributed Database: Transactions and information are not only recorded on the Blockchain, they are actually stored on a database too. This database is built into the Blockchain itself, so businesses don’t need to worry about managing or protecting a server. Instead, it is kept safe and secured on a specialized hardware device that is always online. Businesses and consumers alike will have access to their private copy of the Blockchain’s database at any time they want.
Easy Business Operations: One of the great things about the Blockchain technology is how it allows decentralized systems for transactions and information to be built into the business itself. For instance, an order in a restaurant could be placed by a customer with a smartphone. The orders will then be matched up with a kitchen bot that will deliver the food right to the door. All transactions are kept under close supervision by a decentralized system of rules and consensus, which ensures all the orders are delivered by the correct bot. This is just one example of how the Blockchain can revolutionize the food industry but there are many more examples waiting to be introduced.
Secure Distributed Ledger System: In addition to being used in the food industry, the Blockchain can also be applied to other industries, including the finance and banking industries. Since the Blockchain works through a distributed ledger, it is much more secure than a traditional ledger, thus eliminating the need for a third party to make any transactions on your behalf. This is done through what is called a Distributed Ledger System, which keeps everything written down and maintained in the group that owns the ledger, instead of in a separate location and secured by multiple computers. As such, a single transaction made on the Blockchain would not show up on your financial statements, while multiple transactions would.