Blockchain technology is becoming increasingly integrated into the mainstream, beyond the popular cryptocurrency market. Even traditional financial institutions, banks, investment companies, etc., which originally intended to be bypassed by blockchain technology, are gaining ground and using blockchain technology within their financial platforms.
General advantages of Blockchain technology
Blockchain is built on the strong conviction of a decentralized, transparent and secure digital registry system. More importantly, the blockchain's mission is the "exchange of values without powerful intermediaries acting as arbiters of money and information".
Blockchain boasts cheaper transaction costs – which makes sense since it tries to bypass financial institutions, which make their money from transaction charges. Not only are these transactions less expensive, they are also faster than traditional methods, which include third parties that can slow down the process considerably.
In addition to processing financial transactions in an economic and efficient manner, blockchain is used in so many other applications that take advantage of opportunities for user-controlled networks and the ability to provide a controllable and traceable transaction log, creating a level of trust among counterparties with no previous history of doing business together. For exampleevery user who uses a blockchain register can see what is happening in real time; no one can update the ledger without the agreement of all parties, making the blockchain records more precise than other types.
Benefits of Blockchain efficiency
Humans are slow and wrong. Whenever work is to be checked two or three times by another person, add the time needed to correct an error and companies use too many valuable resources to ensure consistency in a process that could be automated. The use of blockchain for any business process is beneficial for a number of reasons, including:
- The efficiency has improved. Blockchain eliminates much redundancy in operational processes, automating many of them in a stable and foolproof environment. For example, if blockchain is used as a ledger, it only requires a main list, eliminating the need to merge multiple lists. It also ensures that the information processed within the document is correct, eliminating any doubt again from the accuracy of the data. This will allow employees to be used in other ways, since their time will not be spent checking, rechecking and correcting errors on a common document.
- Companies save. Businesses are obviously concerned about their bottom line. When efficient systems such as blockchain are adopted for everyday business processes, the need for third parties is reduced or eliminated, saving on company expenses.
Speed Benefits of Blockchain
The biggest driver for creating a faster blockchain is to encourage companies to be more willing to adopt technology in their day-to-day business. Microsoft is working to get a faster blockchain. Through its Confidential Consortium Blockchain Framework, also known as the Coco Framework, Microsoft aims to produce a blockchain 100 times faster than average. As highlighted on many of the best blockchain blogs, Microsoft's blockchain is compatible with Ethereum, a popular blockchain type.
Mark Russiniovich, chief technology officer of Azure, Microsoft's cloud computing division, was cited in a Fortuna stating, "We expect this to be the foundation of the blockchain for the business." We believe that blockchain can potentially transform any industry. "The additional goal, in addition to the fastest blockchain networks, is also to address privacy issues raised by those in the private sector.
One of the main advantages for companies to use blockchain technology is cost savings associated with a faster network that is also incredibly secure and private. Many companies, such as financial institutions, which work with highly private data, turn to the blockchain to improve security and protect sensitive information.
Second Reutersone of the problems with integrating blockchain into companies that depend on intense data privacy is that there is potential for those who have access to the blockchain network to see the data – since the technology is based on this premise. Therefore, companies have been reluctant to adopt the technology.
Another goal of Microsoft's Coco framework is to offer companies the ability to restrict who can access what is on a blockchain platform, while allowing greater network speed. The Reuters article states that companies like Quorum (Blockchain of JPMorgan Chase & Co.), saw tooth (Intel blockchain), e Rope (blockchain of the R3 banking consortium) all expect to adopt the Coco Framework.
Bitcoin's blockchain can process an average of 7 transactions per second making it one of the slowest blockchains in circulation, especially compared to cryptocurrency platforms like Ethereum, Ripple and LTC and centralized platforms like PayPal and Visa. It takes about 60 minutes to confirm the transactions.
Ethereum's blockchain can execute up to 12-20 transactions per second, which is quite slow compared to Ripple, LTC, BCH, PayPal and Visa and takes up to 6 minutes to confirm a single transaction. While Bitcoin is getting the most attention these days, Ethereum is right behind it.
Ripple is a popular cryptocurrency platform capable of processing up to 1500 transactions per second with a confirmation time of 4 seconds, which is much higher than BTC, ETH and LTC. Ripple is far ahead of the curve in proven transaction speeds and the development team claims it can reach up to 50,000 TPS.
PayPal and Visa
The most popular centralized platforms, Visa and PayPal, can process respectively 24000 (56000 max TPS) and 193 (450 TPS max) per second. Visa is currently the most advanced and fastest platform capable of handling the largest number of transactions per second.
MATRIX AI Network
MATRIX AI Network, a blockchain based in Hong Kong and an AI technology company, recently launched a new public demonstration of its proprietary technology, which announces a new standard in the speed and efficiency of the transaction. "The AI-based MATRIX platform has the ability to process more than 50,000 transactions per second – more than Bitcoin, Ethereum, Ripple, plus even PayPal and Visa!" This is due to the merger between powerful artificial intelligence and the consensus mechanism hybrid (PoW + PoS) of the MATRIX blockchain, "he explained Owen Tao, CEO of MATRIX AI Network. "With PoS-based random clustering, a small number of nodes will be chosen as delegates, transactions will be transmitted only between these delegates.In the previous blockchains, transactions must be transferred to each node in a P2P network and the latency increases with the growth in the number of nodes With our algorithm, the reduced number of nodes allows a significantly lower latency due to the reduced overload of the transmission transactions. "
The need for speed
A large number of transactions per second is a necessity if blockchain technology is never able to support large commercial applications. If the network transactions per second are too low, the network risks paralyzing congestion. This could result in an inability to properly confirm the transactions or affect the effectiveness of the transaction. Hard forks have become an industry standard.
A faster blockchain is on the horizon, which will give companies and other institutions the power of secure, private, protected and fast data sharing and the widespread commercial adoption of blockchain technology. The opinions expressed here by the contributors are their own.
Published November 18, 2018