The 5 keys and applications of blockchain

A few years ago, not many people had heard of the term blockchain. However, with the popularity of cryptocurrencies such as Bitcoin and the focus of investors, blockchain technology has gradually become one of the important representative trends of new technologies, along with artificial intelligence (AI), cloud (Cloud), big data (Big Data), Internet of Things (Internet of Things), and mobile vehicles (Mobile).

But even so, most people still have little understanding of what blockchain is and why it has such a great impact.

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Simply put, the concept of blockchain comes from a ledger record. When A wants to give B 100 yuan, according to the current method, it can be completed through bank transfer. At this time, A's bank account will decrease by 100 yuan, and B's bank account will increase by 100 yuan.

But when conducting online transactions, if it is not done through a financial institution, how can we ensure that the 100 yuan from A to B will be fully recorded and not tampered with? A simple idea is that if this transaction is transmitted to everyone participating in the transaction on the Internet and confirmed by every participant, this transaction will be permanently and truly preserved without worrying about being falsified. This distributed ledger technology (Distributed Ledger Technology), or the so-called smart contracts (Smart Contracts), constitutes the core concept of blockchain technology.

5 key features of blockchain

Compared with the traditional transaction model with banks as financial intermediaries, blockchain technology provides features such as "decentralization", "anonymity", "immutability", "traceability" and "encryption security", which allows participants to establish a trust mechanism without knowing each other, and reduces costs compared to the centralized transaction model with financial institutions as the medium, and makes information authentic, transparent and traceable, and can protect the privacy of customers, while recording transaction data in chronological order.

Due to these characteristics of blockchain, its application range is very wide, from product history tracking and product protection to preventing loss, theft, forgery, and substitution, and the entire supply chain process can be fully recorded, covering almost all industries.

Applications of blockchain

In the financial industry, such as identity authentication, transaction settlement, fund transfer, trade financing, insurance, securities, supervision technology, etc., blockchain technology can be used to improve efficiency. Recently, a bank has used blockchain technology to allow employees to watch movies without the need to bring movie tickets. They only need to send the proof of the movie ticket to the employee's mobile phone, and they can enter the theater quickly by just beeping the phone.

In addition, financial companies are also studying the application of blockchain technology in electronic confirmations to save the cost of constant correspondence between banks and accounting firms for customer financial reports. Although blockchain technology is still subject to the problem that the more participants there are, the slower the speed will be, but with the advancement of technology, the frequency of transactions that blockchain technology can handle will become faster and faster, and its application is bound to become more and more popular.