Bitcoin and blockchain: The new hot topics in the Finance world. Bitcoin is a new crypto-currency and payment system developed by a programmer called Satoshi Nakamoto. Bitcoin is recognized by many major countries as a valid unit of currency. The system is peer-to-peer, and transactions take place between users directly, without the need for an intermediary in between. The record of the transactions is kept in a publicly distributed ledger, called the blockchain.
It is an open-source distributed ledger, which is cryptographically protected in such a way that, while transactions and records are transparently visible, it cannot be deleted, modified or tampered with in any way. This eliminates or at least, reduces greatly the need for a government, financial institution, lawyer or a broker to be an intermediary between the contractor and contractee. With middlemen eliminated, the producer/owner of the property can enjoy full benefit of their asset, without the necessity of paying commission or selling charges.
The beauty of blockchain is that, it can be used for many types of transactions, not just finance-related ones. Purchase and sale of physical property, intellectual property, and other legal contracts can all be transacted through blockchain. For example, if a musician would want to publish his/her work, and establish IP over its usage in videos or films, they can store the IP in the blockchain, and anyone who wanted to use it would have to pay a price to obtain the private key from the musician for a specified period of time. This way, the artist gets full royalties, and protects his/her rights over the Intellectual Property. The record of the transaction is encrypted in the blockchain, visible but not modifiable.
This technology has the potential to disrupt the entire financial industry, and other services industries besides. While there is no formal system of governance in place yet, the world is slowly learning to accept blockchain as a potential platform for conducting transactions. It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden.
Author
Avni Jesrani
Avni has a Masters degree in Finance and Management from the University of Strathclyde, UK. She has gained significant exposure in the statutory audits of various industries such as retail, port management, medical transcription and power generation, among others.
Thanks for finally talking about >Blockchain- A revolution in the Finance
world <Loved it!