Blockchain provides the foundation for digital cryptocurrency technologies. It is a distributed database which can record every digital event or transaction which starts or gets shared with each participating party.

When transactions occur in blockchain, they receive verification from a majority of those who are using the system. It keeps a record of each activity, with the first concept published in 2008 under a whitepaper authored by an individual or group calling themselves Satoshi Nakamoto.

How Blockchain Technology Works

Anything of value, from cars to information, can be recorded as a transaction using blockchain. By exchanging digital assets through cryptographic evidence or third-party trust, there is value in such an action for both parties. This process is how a cryptocurrency like Bitcoin develops.

Each transaction is secure and anonymous, protected by a digital signature. There is not a central server which keeps information in blockchain either. The data goes to millions of people around the world who connect to the cryptocurrency of choice. Then the transaction receives approval, gets added to the blockchain, and assets transfer from one person to the other.

When an authorized computer connects to the blockchain, a copy of the data goes to that system. This event creates a “node” that stays in sync with the latest block of information. Then it can help in the execution of a transaction for an incentive, which is how the process of “mining” begins with this technology.

Benefits of Using Blockchain

According to Jean Chalopin, “The primary benefit of using blockchain is that it is entirely transparent. Every participant or node receives a copy of the information, which means everyone has access to all of the data. Each one can provide verification with the need for a mediator.”

There are these additional benefits to consider with blockchain as well.

1. It is flexible.

Smart contracts are a common feature with blockchain, which are actions that occur when specific conditions are met. This process makes it easier for the network to operate at the speed of business.

2. Blockchain is secure.

The permissions and cryptography ensure that there is no unauthorized access to the data.

3. Information sharing occurs in real time.

The ledger is updated and shared with each incoming transaction when using this technology. Everything occurs in real time because the data is not under the control of a central server.

4. It operates on consensus.

Blockchain requires every relevant participant on the network to agree on the validity of a transaction. Consensus algorithms make this benefit possible. If it does not occur, then neither does the transaction.

Why Choose Blockchain?

The primary reason to choose blockchain is that it will save you time. It eliminates the need to have a centralized authority to verify a transaction before a settlement can occur. That means it is cheaper and faster to move assets.

Blockchain will also reduce the traditional expenses of asset transfer. Instead of using a third-party system to create results, each participant can share directly with each other.

The potential use of this technology is vast. By getting to know what it can do today, you can become part of blockchain’s future.

Disclaimer:  The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.

About Deltec

Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.

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