We often find ourselves in a quandary while discussing blockchain to newcomers. The technology is so mature, with so many use-cases, that it might be difficult to grasp the concept of blockchain. Blockchain is an immutable ledger that makes it easier to record transactions and assets across corporate networks. Srajan Agarwal of Elets News Network (ENN), brings you Blockchain’s current and future scenario.
From a technological standpoint, the blockchain expands beyond Bitcoin’s single cryptocurrency emphasis to represent a multitude of cryptocurrency-based applications. While the fundamental technical notion may appear to be similar to a database owing to the blocks inside the chain carrying the data, blockchain is more of a one- of-a-kind data structure than a database. The blocks reflect a certain database implementation’s transaction log, which is continually growing as “finished” blocks are appended in a linear, chronological sequence with a fresh set of records.
Blockchain is one of the most interesting technological advancements right now. Many people are familiar with it as a technology that supports Bitcoin and other cryptocurrencies. However, its potential applications are substantially broader, including digital “smart” contracts, logistics and supply chain provenance and security, and identity theft prevention. There are several others – blockchain supporters claim that it has the ability to improve security and integrity in any system that includes multiple parties sharing access to a database.
A new wave of the Internet, known as web 3.0, is on its way ahead of schedule, thanks to blockchain technology. It attracts fans across the world by promising decentralisation, data security, and internet freedom. Not unexpectedly, the blockchain industry is expanding at an extraordinary rate: from $7 billion in 2022 to $164 billion in 2029!
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Non-Fungible Tokens (NFTs) were the hot topic in the blockchain world in 2021. Astronomical values attained by artwork such as Beeple’s The First 5000 Days made several headlines, firmly establishing the notion of unique digital currencies existing on blockchains in the public mind.
Blockchain’s Current Position
The greatest place to start thinking about blockchain developments in 2022 is with a look at the statistics for blockchain.
• Enterprises are looking for new blockchain use cases with applications in a variety of industries, including healthcare, gambling, and identity management.
• With over 70 million blockchain wallets in use right now, many additional positive blockchain forecasts for the future are realistic.
• Most importantly, the worldwide blockchain industry is expected to develop at a CAGR of more than 69 per cent between 2019 and 2025.
As a new technology with several potential uses, blockchain includes a precise and verifiable record of every single transaction that has ever occurred. To digitally sign, we employ the SHA- 256 hash function and the Elliptic Curve Digital Signature Algorithm (ECDSA). Every effort to plagiarise a submitted article is a violation of the regulations. The transmission of a document is additionally encrypted using complicated cryptographic concepts and security methods, ensuring that no one can see or change the transaction.
Since the early 1990s, blockchain technology has been studied and utilised as a database system to store documents and hashes. Today, blockchain technology serves as the foundation for a new type of ‘digital trust,’ in which individuals throughout the network may transmit currency and information without the need for a central middleman. This new type of digital trust will cause destruction in businesses that rely on ‘gatekeepers.’
Ethereum– a decentralised blockchain with smart contract functionality, established the groundwork for blockchain 2.0, the second generation of blockchain technology that can not only move currency but also execute smart contracts to develop decentralised apps. This adaptability enabled new Decentralised Finance (DeFi) use-cases like lending, borrowing, staking, and yield farming. DeFi has evolved to become a $71.8 billion market in only a few years and is developing at a far quicker rate.
Blockchain changing the role of the auditor
As blockchain becomes more integrated into accounting operations, the job of accountants and auditors will change. Human auditors will undoubtedly continue to lead the process of developing audit standards and techniques. These will then be encoded into a blockchain, allowing transactions to be audited in real time rather than after the fact.
Each entity inside a firm will share the same set of data, and there will be no need to reconcile. As a result, accountants’ roles are expected to shift as well. A real-time blockchain audit may find some inaccuracies in transactions. In this instance, a person would have to intervene to figure out what happened. Finance specialists will be in charge of internal financial governance as well.
Now, we may picture a world in which contracts are incorporated in digital code and recorded in transparent and shared databases which are safeguarded from deletion, manipulation, and amendment using blockchain.
Every agreement, procedure, task, and payment in this society would have a digital record and signature that could be recognised, authenticated, archived, and shared. Lawyers, brokers, and bankers may no longer be required as intermediaries. Individuals, companies, machines, and algorithms would be able to freely transact and engage with one another. This is blockchain’s enormous potential.
The Future of Blockchain
Blockchain technology is delivering us the Internet of Value: a new platform that will change the commercial world. It crosses all physical and geographical boundaries and employs math and encryption to facilitate worldwide transactions. The ability of blockchain to record and keep person-to-person transactional history eliminates the possibility of fraud, hacking, and third-party involvement.
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Blockchain eliminates the need for a centralised management body, such as a bank. The system is simply a collection of data blocks linked together in a transaction ledger. Its open-source, impermeable structure allows for unprecedented transparency. Each record is transmitted to millions of computers worldwide and checked for correctness.
This relatively new technology is revolutionising a wide range of businesses. It facilitates automated commercial transactions and financial record-keeping. This results in a less expensive and speedier solution that is particularly appealing to banks and enterprises.
These models will aid in the standardisation of information from various sources as well as the acquisition of new and more robust data sets. In the next one to three years, 68 percent of CTOs and CIOs expect a scalable governance model for interactions across different blockchain networks to be a key part of their organisation’s blockchain ecosystem.
Conclusion
The numerous applications of blockchain technology and the recent advancements in various sectors as a result of this technology demonstrate that blockchain has the potential to become a mainstream technology in the near future. It has developed as a technology with the ability to bring about both positive and essential changes. It has improved operations, cut wasteful expenditures, and provided a safe data environment.
Blockchain technology may be extremely complimentary in a future world possibility space that encompasses both centralised and decentralised forms. Like any new technology, it is a concept that first disturbs, but over time it may support the growth of a wider ecosystem that incorporates both the old and new innovations.
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