Nowadays, countries like Japan, Russia, Sweden, Germany, U.K, U.S, and Canada have accepted Bitcoin as a legal currency or mode of payment. Recently, in 2016, ICICI Bank in a partnership with Emirates NBD (Dubai bank) announced that it has successfully completed international trade finance transactions through blockchain technology.
Created by a pseudonym Satoshi Nakamoto in 2008, Bitcoin is a crypto currency that helps in performing secure peer-to-peer transactions. No government, no bank, no other financial institutions are involved in this digital currency.
Although Bitcoin is very popular among people, even after that several governments do not know this digital currency. To make informed, here is a blog post that will properly describe about the Bitcoin. Read on!
What is Blockchain Technology?
A blockchain is an online public distributed ledger that is used to simplify the transactions. The blockchain technology helps users to do the transactions securely without any involvement of third party.
Unlike the centralized network of ledger of bank, blockchain is anonymous. This technology have a strong faith in privacy and thus secure the user identities. This key feature of blockchain makes it the most secured and popular way of making transactions.
In technical terms, the algorithm that is used in blockchain made it decentralized and people do not need to depend on third party, such as bank, government, and authority to verify transactions.
The technology has immense potential that can completely change the financial system.
How Technology Works?
As per Co-founder of Unocoin (Bitcoin Blockchain Company of India), Sunny Ray, “Blockchain helps in doing transactions between two entities securely. It is a distributed ledger that records each transaction. A set of transactions create a block and each block is connected to next block through a cryptographic signature. Anyone with permission has an authority to use blockchain as ledger. If the process is pre-selected to miner then it is called ‘permissioned, if it is open worldwide, then the ledger is known as ‘unpermissioned’.
Why Banks are Interested in this Technology?
Major Banks are interested in Blockchain technology as this eases the money transfers, back-end functions, and keeps the record of every transaction.
Besides, another major reason why banks are heading towards this Bitcoin mining is that it reproduces the paper work done on international trade finance process in a decentralized electronic ledger. The ledger gives banks and other participating entities an ability to access the information.
In addition, the blockchain technology also enables entities to track the assets’ ownership digitally.
Leading Indian IT companies, namely TCS and Infosys are also using the blockchain technology. The companies use blockchain mechanism in order to make banking platforms.
Where Blockchain Technology can be used?
The blockchain technology is not only used in the financial sector, but also in other sectors too. For instance, the Latin American, Honduras government have placed the land records on the blockchain – public ledger. Whenever the land ownership changed, the blockchain records it all details publicly.
Apart from this, the ASX – Australian Securities Exchange has also announced that this year it will move clearing and settlement system of Australia to the blockchain.
In the past October 2015, the American stock exchange, Nasdaq revealed that how private companies can use the blockchain based technology to describe their share ownership.
Is Using Blockchain Technology Safe?
The best part of using Blockchain technology is that it allows users to do a transaction with no involvement of government, bank, and any other financial authority. In addition, blockchain also helps financial institutions to do transactions without any intervention of third party.
All the transactions that had been done are properly maintained in blocks in the electronic ledger. Using cryptography, the electronic ledger is shared in between the computer servers.
Using the blockchain technology is pretty safe, as it verifies the transaction safely that took place between the individuals. It is believed that this latest blockchain technology has an immense potential to reduce the costs and other inefficiencies in financial world.
The above-mentioned information regarding the Bitcoin are sufficient for those, who are planning to invest in this technology. If you are also the one, all you need to do is think of your budget and then take an action accordingly. However, to cater to the investor’s needs, there are numerous Bitcoin mining websites, such as Hashgains that can help you earn profits on ROI through this hyper-growth technology.