The Block Chain technology
By building block Chains many branches of more efficient work and management options are opened. The fact that no server is used as an intermediary is particularly helpful, and no middleman need be used. It is rather the use of a decentarlised ledger which uses a large network of users for verification.
These so-called “Miners” provide the processing power of their computers to help solve complicated mathematical keys and to create new blocks. Each block then receives a custom timestamp and builds on the previous block. These data blocks are continuous, chronological and linearly extended.
The manipulation of previous blocks is thus ruled out because of the subsequent block always documents the checksum of the previous block. This tampering is considered the most striking feature of block chain technology.
Moreover, safety is ensured by encryption using a hash function. Should anyone come up with the idea and want to manipulate the block chain, then they will have to change at least 51% of the copies. This requires such a huge amount of work that such manipulation can be considered completely uneconomical.
The financial, energy and insurance industries in block chain fever
The inviolability of such technology can naturally make entire industries sit up. In addition, the omission of a mediating instance is a costly and technically administrative solution in sales for many institutions.
Thus, the financial and insurance industries benefit from the intermediary function of their institution. The lender can directly check the creditworthiness of the borrower and do the transaction immediately. The acquired confidence of the institutions, for example as an intermediary in transactions of all kinds, can then be utilized for other services. In addition, services of this kind can be processed at a much higher speed, which can be particularly advantageous in the field of international transfers and securities transactions, of course.
Another small revolution is in the offing in legal departments, since lawyers for the rubber stamping of contracts is no longer needed when using the block chain technology. The algorithms of the block chain would check compliance of contractual principles and ensure enforcement of the rights of all contractors. This is known as of the use of so-called “smart Contracts”. Through this the banking sector alone expects savings of 20 billion euros annually.
In future companies could also create, with the help of the block chain, a centralized payment system that is able to abolish cashier, monetary systems and debit card machines. Large companies could also use block chain technology to document and optimize their complete supply chain. Thus consumers and customers have the advantage that they can track the entire process from production to delivery. This ensures greater transparency and trust, especially in the food industry.
Energy giants like RWE are planning charging for electric vehicles paid directly, for example by induction fields at traffic lights. The therewith associated small amounts do not represent billing problems for block chains and smart contracts.
State enterprises and the block chain
Even at Sate level you’ll find various considerations regarding the use of block chains. Greece and Honduras are playing with the idea of using block chains in the management of land registry entries with unclear ownership.
The so-called “Democracy 2.0” is an important keyword. The transparency and security of manipulation of block chain technology could increase the confidence of voters and the turnout as a whole. Plebiscitary measures could be worked out so much faster and more cost effectively.
The future remains exciting
The future applications of the block chain are therefore immense. The technology lends itself to facilitating the verification of contractual operations. It enables a faster and more cost-effective solution for industries with switching functions, whereby new resources can be exempted. Also new companies and start-ups have the opportunity of following in the footsteps of “traditional industries” more easily, as the block chain serves as a confidence guarantee.
The block chain has the power to realign the rules of the Internet. This is done through the decentralization of information monopolies, thus the de facto power in the World Wide Web. Central mechanisms and focal points will be transferred to a network of different computers. Banks or insurance companies can be thought of as among these information monopolies. Institutions that allow the transmission and verification of sensitive data.
The more than 850 worldwide start-ups and more than one billion euros in investment funds should be a further indication of the potential of the block chain technology. In addition, block chain technology was described by the “World Economic Forum” as one of the six upcoming megatrends. The future remains exciting.