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Blockchain technology has the potential to revolutionize financial transactions but companies will have to overcome several challenges in order to experience any benefits, according to industry experts.
Blockchain was developed alongside the digital cryptocurrency bitcoin. It works like a huge, decentralized ledger which records every transaction and stores this information on a global network to prevent tampering. Bitcoin, itself, is a virtual currency that allows users to exchange online credits for goods and services.
Several organisations have looked into alternative applications for the blockchain, away from the digital currency. For instance, Nasdaq is trialling a system to allow investors to securely vote in shareholders meetings, while Bank of America has filed several blockchain related patents.
Some of the possible benefits of adopting blockchain include simplifying business processes and creating trusted, safe records of business agreements and transactions, according to Vijay Michalik, research analyst for consultancy firm Frost & Sullivan.
In the longer term, blockchain may even replace law contracts and written agreements with computer code.
“This would challenge trusted third party business models like eBay, Amazon and Uber by creating a way for buyers and sellers to interact safely without the costs of a platform,” he told CNBC via email.
“Early forms of these decentralized autonomous businesses are already emerging.”
[“Source-cnbc”]