Editor's Note: For the latest blockchain news, check out Blockchain Tech News, a sister publication of Mobile Payments Today.
Regardless of the industry you are in, you may have heard the word blockchain spoken with subjection, or you might feel like bitcoin is the best investment in the world or a tool for criminals. The blockchain itself, however, is often misunderstood.
The blockchain actually, can benefit almost all sectors from restaurants to suppliers of mobile wallets
Let's have a look at what is blockchain and how it can help you transform the furniture
# 39; is the blockchain?
The blockchain is a decentralized ledger, which is immutable and completely transparent.
The bitcoin wiki describes it as "a transaction database shared by all the nodes participating in a system. A complete copy of the chain of blocks in a currency contains all the transactions ever performed in the currency and with this information you can find out how much value belonged to each address at any point in the story "
This means that the blockchain serves as a public register, where each transaction is recorded and recorded by a group of users. It is the backbone of bitcoin, a decentralized virtual currency.
Users confirm transactions through a process known as mining, where users lend the processing power of the computer to solve mathematical equations to confirm and register bitcoin transactions.
was the first to use blockchain, it is not the only app for this. Ethereum has also recently developed its own blockchain, and each cryptocurrency also uses some form of the blockchain.
What is it for?
You could think of yourself: all this sounds great, but what does the blockchain do for me? I do not use virtual currency. Well, the blockchain has a number of uses.
For one, it can enable smart contracts, which Wikipedia defines as "an information protocol designed to facilitate, verify or digitally impose the negotiation or execution of a contract, allow the execution of credible transactions without third parties parts. "
Ethereum's blockchain can help automate this process by pushing data to a contract generated by the user to be executed on a certain date. This can be incredibly useful for banks or other financial institutions looking to automate large international contracts.
Other uses of the blockchain include: identity management, automated compliance, secure voting, supply chain management and decentralized ownership.
What does blockchain mean for the mobile payment industry?
For one, it can greatly increase consumer confidence by its secure nature. Blockchain can provide an immutable database for the user's personal data, adding an additional level of security. Moreover, if there are illegitimate transactions, it is easy to track down.
Even for customers who are reluctant to put their credit cards on their phones they can use blockchain-based mobile payment solutions, which allow customers to use tokens instead of their credit cards.
These apps can also fuel loyalty programs for retailers. Customers can get tokens when they spend money, which can redeem for purchases or trade with other users.
How does fintech and the traditional banking system use blockchain?
There are many ways they can use it. Banks are currently experimenting with how to use the Ethereum blockchain to enhance smart contracts. These smart contracts can help you automatically verify and enforce the terms of a contract, which can be a big advantage for banks and fintech.
Financial institutions can also use blockchain for identity management or to settle loans more quickly and efficiently than old processes.
The blockchain can also help simplify trade finance by allowing instant payments for large overseas shipments, which normally take weeks to finalize with paper routes.