Innovations In Blockchain Technology;
There have been a number of innovations over the history of blockchain. Without these innovations, blockchain technology wouldn’t be nearly as useful as it is today. Those innovations include all of the following:
1. Paying with cryptocurrency.
First, one of blockchain’s most exciting applications is its ability to facilitate financial transactions in a very different way compared to legacy financial systems like credit card traditional payment processors. Recently, the rise of cryptocurrency technology has turned cryptocurrency into viable currency.
Bitcoin: by nature, this is the first and most obvious blockchain innovation.
Blockchain:
The second innovation is when people realized that the underlying technology behind bitcoin – the blockchain – could be used for more than just bitcoin.
People realized it could be used for other cryptocurrencies, for example, or for a wide range of other industries and purposes. This is where the history of blockchain technology and innovation really took off.
Ethereum & The Smart Contract:
The second major blockchain platform after Bitcoin was the Ethereum blockchain. The primary advantage of the Ethereum blockchain over previous blockchains was the smart contract system.
Essentially, this involved building small computer programs directly in the blockchain. This allowed conventional financial tools – like loans or bonds – to be represented on the blockchain, instead of just bitcoins and cryptocurrencies.
2. System integrity.
Second, the biggest upside for using blockchain is system integrity. Cryptocurrencies and blockchain technology eliminate the need for middlemen. Hence, it’s these middlemen that tend to overcomplicate payments and charge expensive fees on top of large transactions. As such, the very design of blockchain lends itself to security.
Blockchain is a decentralized ledger. Therefore, transactions are not visible to any person besides the two parties engaging in the asset transfer. Also, crypto wallets are essentially immune to fraud due to their complexity and uniqueness. Hence, it’s difficult to steal assets. The assets become invulnerable to forgery.
For example, the Internet of Services Foundation has created a scalable blockchain infrastructure for the future of online business. Its high throughput processing and security offer an intriguing alternative from cryptocurrency mainstays like Bitcoin and Ethereum. To date, these cryptocurrencies have been unable to scale for mass adoption. The Internet of Services Foundation’s token, IOST, has clearly caught the eye of global blockchain enthusiasts.
3. Regulatory concerns.
Third, for those interested in commercial finance, blockchain’s applications in cross border transactions are particularly exciting. One of the main advantages of cryptocurrencies to fiat currencies is their ability to be sent across borders without any fees. For example, money transfers can be conducted between any two locations in the world. All users need is a connection to the Internet.
Therefore, Blockchain technology has the potential to offer a more secure experience than traditional wire services. Additionally, users avoid conversion fees between currencies. Small online businesses can also conduct transactions easier than ever. That’s because cryptocurrencies avoid the need for currency conversions that cost both parties significant amounts of money.
4. Mainstream banking adoption.
Fourth, large banks are already beginning to develop infrastructures to support the new assets and payment systems based in the blockchain. In June 2017, a group of seven of Europe’s largest banks formed a blockchain consortium. Forming the consortium was necessary for simplifying payments. Therefore, the result has been advantageous for small and medium enterprises across national borders.
Now, there are many benefits to going paperless and eliminating the need for many brick and mortar establishments. Also, banks can offer faster, easier, and cheaper transactions for their customers. Hence, using blockchain innovations will create transactions that are a fraction of current costs.
Recently, the consortium has indicated more European banks have plans to join in 2018. As the European consortium grows, it wouldn’t be surprising to see other banks around the world engaging in similar activities.
5. Financial automation.
Fifth, blockchain’s most interesting application is the potential to offer systems where users can automate payments and optimize their finances. For example, by using embedded smart contracts on blockchain ledgers, financial institutions can easily and efficiently collect insurance and mortgage payments. Therefore, the result would mean more on-time payments. Also, consumers could spend less time organizing their finances.
Now, blockchain technology continues to grow in popularity. Hence, it will be important to monitor how its applications will affect all industries. Already, the rise of cryptocurrencies have already attracted investors and financial institutions. Now, the financial industry is poised to gain the most immediate impact from blockchain innovations.
Today, there are smarter blockchain networks, better cryptocurrencies, and improved infrastructures in development by a variety of companies and groups. Moving forward, blockchain technology is set to completely reshape the financial industry as early as the next decade.
6. Proof Of Stake:
Proof of stake started appearing in late 2016 and early 2017. Today, most blockchains are secured by Proof of Work, which means the group with the largest computing power makes the decisions (i.e., the miners with the biggest share).
New blockchain technology replaces this with proof of stake. This is a key security innovation because it removes one of the only security flaws in traditional blockchains – the fact that miners with a 51% share of processing power could take control of bitcoin or other cryptocurrencies.
Scaling:
Scaled blockchain technology will accelerate blockchain processing in the future. Today, blockchain technology requires every computer in the network to process every transaction. This is slow and inefficient.
Scaled blockchain technology will accelerate the process by determining the precise number of computers needed to process each transaction, and then utilizing other computers for other tasks.
REFERENCE;
https://bitcoinexchangeguide.com/blockchain-distributed-ledger-technology/
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