Blockchain technology is going to change the way the world does business. The technology was originally designed for Bitcoin implementation, but it is ideal for all business transactions. Blockchain was developed in such a way that it doesn’t rely on bitcoin, so it can be utilized with or without the presence of bitcoin.

When blockchain is broken down into its most basic form, it’s a digital ledger of transactions.

Programmers can change blockchain to record anything of value, but for businesses, financial transactions will be the key most important use of blockchain.

Distributed Database Storage

Blockchains are held in distributed databases. What this means is that the blockchain is in a shared, reconciled database. Millions of computers worldwide host the database, and all records are public and verifiable.

A lack of a centralized version of the database means:

  • Less risk of corruptible data
  • Accessibility from anyone on the internet

Blockchains store blocks across networks so that the blockchain doesn’t suffer from single entity control and has no single point of failure.

Reconciliation of the blockchain is done every ten minutes, with every group of transactions reconciled called a “block.” Self-auditing, blockchains are not able to be corrupted and they’re fully transparent.

Decentralized by nature, blockchain offers security, enhancement to ledgers and provides less risk of corruptible data.

How Blockchain Will Affect Business in the Future

Ownership tracking processes are expensive using traditional methods. Blockchain will allow anything’s ownership to be tracked. Offering a public ledger, the transactions that are part of the blockchain can be calculated by all users as a form of a balance sheet.

Balance sheets will never be the same and will allow:

  • All parties to maintain a full copy of a ledger.
  • Non-editable data that is impossible to erase and undo.
  • Confirmation that a transaction occurred.
  • Transactions that are all digitally signed to prove item sales.
  • Confirmation of transactions in 10 minutes.

Blockchains are very powerful, and it’s only a matter of time before they become an integral part of transactions across the world. The possibilities for blockchain are still unrealized to their full potential, but we have a few indications of what might happen thanks to this technology.

A few ways this technology may change the way the world does business includes:

  • Real estate transactions, where both parties have synchronized copies of a transactions that ensure contract integrity. Digitally signed, blockchains are authorized and provide proof that a real estate transaction really occurred.
  • Fraud in financial securities will be reduced greatly due to speed and the non-repudiation of blockchains.
  • Artwork, where the chain of ownership can be used to determine authenticity of a piece.
  • Tickets are routinely fraudulent and faked, but blockchain allows transaction authentication in a low-cost form.
  • Auditing will be cut down dramatically thanks to synchronized data that is accessible.

Consensus among ledgers will be handled in many different ways. Open and decentralized ledgers will be difficult to embrace due to the nature of the model to require transaction acceptance.

Since no one is in charge of these ledgers, invalid ledgers can result in a ledger becoming de-legitimized. Bitcoin uses this form of a ledger, and it works well for the currency.

Private ledgers allow for a private entity to validate transactions. The debate over privatization is that the basis of blockchain is negated: decentralization.

Smart Contracts and a Global Searchable Database

A global searchable database of transactions would lower the costs of transaction searches drastically. This technology is important, but then there’s the possibility of what’s called “smart contracts.”

Blockchains can consist of smart contracts, which sound complex on the outside but are already in development today.

Contracts are routinely expensive, causing many transactions to take excessive time to complete. Smart contracts eliminate this long wait and allow for:

  • Self-execution of complex instructions

In effect, the contract will go into effect using autonomous agents. That is, there’s no need for coordinating costs and working with an agency. Little or no management is needed with smart contracts.

Contracts today, for high-value items, may include money being put in escrow along with human interaction. The instructions, provided to the escrow company, would need to be followed by a human that is responsible for the implementation of the contract and its instructions.

Smart contracts eliminate many of these contractual hiccups caused by humans.

The contract itself would include coding that will be executed once the contract is signed. For example, if a billionaire is selling a yacht, smart contracts could help.

  • Billionaire A is selling a yacht to billionaire B for $50 million.
  • A smart contract is made.
  • Upon the contract being signed, the yacht is transferred to billionaire B.

The coding in the contract only executes upon the contract’s signature. There’s no need to wait for a third-party to execute instructions within the contract.

Blockchains will change the way of the financial world.

There are a myriad of pilot programs using blockchains, and money is pouring into the technology to bring it into the mainstream. Accounting experts need to stay on top of the blockchain revolution.

A shift in the way transactions are handled and businesses are managed is underway.

Transparency and business efficiency will increase thanks to blockchain. Accountants will be the first source of information for clients that are looking to implement blockchain into their businesses.

Adoption of Blockchain is Underway

Industries are starting to look to blockchain for intellectual property. Ascribe, a company dealing with the creators of digital art, allows their clients to watermark their work and transfer it. Blockchain technology ensures that the artist is paid.

And the art is transferred from one collection to the other with blockchain.

Artists also have control of their digital art, allowing them the choice of when and where the art is deployed. It’s a way to use blockchain that has worked well to make sure that digital artists are compensated accordingly.

We’re at the forefront of a transactional change in the way we conduct business, and it’s going to make transactions more transparent and robust than ever before.

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