Over the recent period, it seems that everyone is talking only about Bitcoin and Blockchain, with blockchain technology being considered the next hot thing in the world of finance, but also in the worlds of business, high-tech and technology. The new technology is about to change the world we live in, as it can remove bureaucratic and managerial barriers, give up intermediaries in various transactions, create new markets, increase privacy and connect countries, businesses and people directly.

The next digital revolution

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Many experts argue that blockchain technology is not just a negligible and unimportant "hype", as there is a belief that this technology is about to change the world and lead to a real revolution in the world of finance. For those who do not know, the technology was developed by Satoshi Nakamoto. To this day it is not known who the anonymous programmer who is hiding under the Japanese pen name is, and perhaps it is a programmer or a group of programmers who prefer to remain anonymous. However, it is important to remember that Satoshi Nakamoto developed blockchain as a technological infrastructure for the distributed digital currency Bitcoin, and only in the last two years have financial and business entities begun to discover the wonders of technology and explore how to implement it to streamline large systems and save various fees and costs.

Blockchain technology, in Hebrew - "chain of blocks", has in fact become a factor that ignited the imagination and hopes of anarchists into a significant factor in corporations and entrepreneurs. The latter have understood how technology can be used to streamline processes and operate without the supervision or management of a key entity that pockets high commissions. Simply put, a blockchain can be defined as a distributed database on the content of which all parties involved agree, so a kind of general ledger is created that is stored on the computers of all users.

Blockchain in numbers:

2008 - The year Stoshi Nakamoto published his study in which the terms Block and Chain were first mentioned.

15M - Users who have a blockchain based wallet.

0.5% - People in the world today use blockchain technology (compared to 50% who use the Internet).

1,000 - Employees assigned to IBM to engage in blockchain-based IoT projects (in addition to a $ 200 million investment).

1,324 - The amount of cryptocurrencies (such as Bitcoin, Etherium, etc.) that exist in the world as of the date of publication of this post.

194,993 - The amount of Bitcoin coins transferred in the largest transaction to date (transaction link).

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Blockchain is an innovative concept in the world of computing where the main idea behind the technology is to create a system that enables online business activity without the need for the supervision of a central management entity. For example, transferring funds between colleagues without the need for supervision or management by an outside party. To date the banks have served as supervisors of all the money transfers and are the ones who guaranteed the value of the physical currencies and banknotes. P2P (Peer to Peer) platforms do not have an external body that oversees business activity and technology replaces the role of banks.

This is actually the foundation behind blockchain technology. Using this technology, digital registration is stored on the computers of all network users without revealing their identities. The digital registration includes information about the users' accounts and the registration of remittances made from the accounts, where the information is accessible, transparent and available to any other user, while strictly maintaining the identity of the users and their privacy.

The information is encrypted at the highest level and stored in a block that joins the existing blockchain. Each block is mathematically related to the block in front of it so that existing information stored in the blocks cannot be changed. This reduces fraud and significantly minimizes the risk of various scams. It is worth noting that each block is locked within a given period of time, while in Bitcoin the operation takes about ten minutes. After locking the information and attaching the block to the block chain, the system produces a unique digital signature that originates from the previous block. Therefore, the technology is considered safe and any user who tries to change a particular detail in the information stored in one of the previous blocks will get a different result and its operation will be rejected.

It is important to emphasize that the information on all transactions is stored chronologically in blockchain technology. Once a block is digitally locked it joins the block chain, so the system is considered secure and reliable, and it is almost impossible to forge or change information in the blocks.

Using the technology, all users have access to the data, but they do not have the ability to control the stored information. In this way, third-party supervision of the transfer of virtual currencies between digital wallets can be waived - saving fees, shortening time and streamlining the method for the benefit of the general public. This is exactly why banks and other financial institutions are afraid of technology, and only recently have they begun to explore how blockchain systems can help them.

For example, today when transferring money between banks in different countries, the transfer is made through SWIFT, a kind of international clearing house for transferring information between financial institutions. Due to the brokerage of SWIFT, a higher fee must be paid, when the money transfer process also takes about 3 days. With blockchain technology there is no need for a body like SWIFT, the money transfer is done in just seconds, and additional clearing fees can be waived because of the more advanced technology.

Far beyond distributed digital currencies

The best known use of blockchain technology is of course Bitcoin, the decentralized digital currency. In fact, most decentralized digital currencies are based on similar technology, but Bitcoin is the most common currency, it is also leading a revolution in the financial world and contributing to the popularity of blockchain technology. Corporations have realized the potential that exists in this technology and so they are making initial attempts at how to use blockchain to reduce fees, streamline processes and customer service, avoid mistakes and improve performance.

By the way, to better understand the technology it can be compared to the technology underlying file-sharing networks, for example biTorrent. When you download a particular file in biTorrent like a song, video or full-length movie, the information comes from many computers directly and does not serve centrally. That is, it is possible to give up the service of a central governing body. In the financial world, these are banks and countries, and so are expensive brokerage fees.

In the world of international trade they have started to implement blockchain systems to improve processes, save unnecessary commissions and streamline work for all parties involved. For example, instead of issuing a bill of lading to move goods between countries and companies, it is possible to save all the paperwork since the bill of lading is common to all, including banks, a shipping company, a customs broker, the tax authorities in countries and so on.

A market in insane growth

The blockchain market is growing rapidly, many start-ups are set up one after the other to develop applications and software based on blockchain technology. As an alternative to raising capital from dedicated funds or through crowdfunding platforms.

In conclusion, blockchain technology has recently been adopted by institutional and conservative entities because of the many benefits inherent in it. Beyond the efficient use of digital currencies, technology is expected to change the business world and lead to a revolution in the financial world.