As society become increasingly digital, financial services providers are looking to offer customers the same services to which they’re accustomed, but in a more efficient, secure, and cost effective way. Blockchain’s conceptual framework and underlying code is useful for a variety of financial processes because of the potential it has to give companies a secure, digital alternative to banking processes that are typically bureaucratic, time-consuming, paper-heavy, and expensive.
Blockchain is essentially a global public ledger capable of automatically recording and verifying a high volume of digital transactions, regardless of location. Essentially, it’s a shared database populated with entries that must be confirmed and encrypted. In practical terms, this means that all nodes run on the same software, have a local copy of the whole database, and constantly talk to each other to propagate data and validate it. But what’s unique about this database is that every update is final, nobody can tamper with it. Since blockchain operates through a decentralized platform requiring no central supervision, makes it resistant to fraud.
In fact, Bitcoin is only one of several hundred applications that use blockchain technology today. Blockchain technology has applicability to many business areas including government, healthcare, education, manufacturing, energy and supply chain,” according to Gartner’s blockchain trend insight report, released earlier this year. The firm’s report also predicted that “by 2030, the business value added by blockchain will grow to $3.1 trillion.”
Following the Bitcoin, another technology entered the market- Ethereum. At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications. Like Bitcoin, Ethereum is a distributed public blockchain network. The main difference between the two is that Ethreum is able to record other items such as loans, contracts or other currencies. . While the Bitcoin blockchain is used to track ownership of digital currency (bitcoins), the Ethereum blockchain focuses on running the programming code of any decentralized application.
“One of the things that really catalyzed the [cryptocurrency] market last year was actually that ethereum, in particular, kind of got to a place where you could build apps on top of it,” he said. “You could issue new tokens on top of it; you could create new kinds of financial contracts, using the smart contracts technology,” Jeremy Allaire, CEO and co-founder of fintech company Circle.
On May 2017, the China Center for Information Industry Development (CCID), a research unit under the country’s industrial ministry, officially launched its monthly ratings index (link in Chinese) on 28 crypto coins and the blockchains behind them. The CCID said the index is based on three criteria, technology, application, and innovation, but didn’t publish its methodology. Ethereum is the top-ranked crypto in the first issue of its ratings, while bitcoin only came in at 13th place.
The latest breakthrough technology called “branched pipeline” developed by a group of enthusiasts from New Zealand brings revolution to the world of cryptocurrencies. A new cryptocurrency called Cryum introduces an entirely new technology and generation of cryptocurrency.
MIT researchers have developed a new cryptocurrency that drastically reduces the data users need to join the network and verify transactions — by up to 99 percent compared to today’s popular cryptocurrencies. This means a much more scalable network.
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