Blockchain could allow wholesale insurers to overcome complex transactions that involve a large number of participants and increase efficiency in areas like documentation, claims management and much more.
Blockchain could potentially be used to help prevent piracy in music while also increasing sales.
Patients could have
their health records decentralized and shared across a vast network of healthcare providers more securely.
More secure and efficient financial processes powered by blockchain could save banks up to $20 billion dollars annually by 2022.
Perhaps the most important aspect of blockchain is its versatility. There are currently more than 100 blockchain projects spread across many different industries. Here are some potential applications for the technology.
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Russ’s transaction is verified and his bicycle is on its way!
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The approved block is attached to the previous transaction in the network. Collectively, all the transactions form a blockchain, which cannot be altered, making it both permanent and transparent.
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To verify and validate the block, miners (working alone or in a group) take information from the block and run it through an algorithm.
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Users who participate in verifying Russ's block — via a process called "mining" — will be rewarded with bitcoins.
The block is broadcast to everyone within the peer-to-peer bitcoin network.
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Russ makes the payment
to the retailer, signing it with
a private key of his own address. The transaction
is called a “block.”
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The retailer shares its unique numerical bitcoin address with Russ.
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The online retailer accepts bitcoin, and Russ already has a third-party bitcoin wallet set up that contains his digital funds.
Russ wants to buy a bicycle online.
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To demonstrate how blockchain technology works, let’s take a look at its most common application, a bitcoin transaction.
Since blockchain runs on coded software, it allows transactions to be automated, and
also avoid duplication.
The parties within the network have to reach a consensus for any given transaction to be verified.
The ledger keeps track
of all the details of a transaction, including time, date, parties involved and the transaction amount.
The publicly available ledger is shared amongst all parties within the network and can't be changed or tampered with, making it secure.
Blockchain is a database, or ledger, that allows companies and enterprises to initiate trade digitally without the need for approval from a central authority.
There are few technologies making as much noise in the financial services industry right now as blockchain. It may be regarded primarily as the underlying force behind bitcoin, but the disruptive technology has implications reaching far beyond virtual currency. Before getting into what those implications are, it’s important to understand exactly what blockchain is, and how it works.
