Blockchain technology is one of the newest buzzwords in business. It is hardly surprising considering that the tech is having such an impact over so many different industries.
If you look at the infographic compiled by BitFortune.net, you can see how this tech has been changing the way that we approach different business tasks.
Out of all the industries, however, it is the financial industry that has seen the most upheaval thanks to this tech. Banks have been put on notice that there are faster ways to move money, even when it comes to cross border transactions.
Blockchain tech shows that there are ways to keep track of assets, transfer ownership, and operate more efficiently and more securely. The Bitcoin network was proof of this in its early days. And banks have been responding by looking into creating their own blockchain based apps over the last few years.
Are we at a stage where the industry is completely willing to rely on the blockchain tech? Not quite yet. The majority of current uses of blockchain revolves solely around cryptocurrency, and activities such as trading in cryptocoins, gambling on Bitcoin casino websites, and so on. The tech has yet to truly move on into other industries, so it seems that blockchain still has a lot to teach us. When it was still reasonably obscure, it was proven to be a viable system. What it has not yet proven to be is easily scalable, and this is something that companies need to consider.
Bitcoin was originally intended as an experiment. Did anyone think at the time it would get as big as it did? But the downside to the increase in popularity of the currency is that the system has become a lot more bloated.
If all things go well, transaction verification takes around 10 minutes on the system. But that depends on how many transactions have been submitted to the chain. The more transactions, the higher the potential lag between transmission and verification. Increasing delays in verification times are proving to be a big issue.
Also, of issue is that the charges to use the network have increased substantially. And this is another lesson that we can take from here – the bigger and more popular the chain gets, the more computing power it takes.
In the early days, mining coins was relatively simple and didn’t require any specialized computer equipment. That has changed now as the chain has gotten more popular and more people are trying luck at mining rewards.
As a result, miners are seeing diminishing returns for mining the system, making it a far less attractive option. And, if the miners decide that it is no longer worthwhile to continue, that could mean that system would slow down so much that it would become untenable.
The counter move would be to make it more profitable again for miners, and that means increasing the transaction fees again. This, in turn, makes the system less attractive for those processing transactions on it.
So, no, we are not likely to see all the major banks switching over just yet. There are a lot of kinks to be straightened out first. That said, it will be interesting to see what will people come up with in future as a way of dealing with these issues.
Article and image courtesy Bitfortune.net.
