Blockchain Applications for All Walks of Life

Given the meteoric rise in popularity of cryptocurrencies in 2017, some mainstream financial institutions are clamoring to board the steadily moving crypto train.

The successful launch of Bitcoin futures contracts on CBOE and CME markets has proven that there is a healthy appetite for Wall Street investors to hedge their bets on the daily trade movements of cryptocurrencies.

While the two Chicago-based exchanges will go down in history as the first to offer futures, a number of big players aren’t far behind.

The New York Stock Exchange has officially filed for permission to launch Bitcoin exchange traded funds linked to the CME and CBOE listed futures, and the likes of Goldman Sachsare planning to launch their own cryptocurrency trading desk.

Let’s not forget about the NASDAQ, which is expected to launch its own Bitcoin futures midway through 2018.

While the experts iron out the fine print of their plans to offer Bitcoin futures on their futures platform, NASDAQ shared some important facets of the underlying technology that breathes life into cryptocurrencies – the Blockchain.

Blockchain 101

For the uninitiated, we should take a quick glance at Bitcoin’s Blockchain. Put simply, this particular Blockchain is an electronic accounting ledger that records every single transaction made using Bitcoin since its inception.

The ledger is shared on a worldwide network of computers, that keeps exact copies of the entire Blockchain. Batches of transactions are stored on blocks which, when full, are added to the chain – hence the word ‘Blockchain.’ Every transaction must be verified by nodes on the Blockchain before it is stored on the Blockchain.

Given this watered-down definition of Blockchain technology, its application is almost endless, as we have seen with the creation of a wide variety of cryptocurrencies.

For the NASDAQ, and other financial institutions, Blockchain application for transactions is of the utmost interest and it allows for a number of crucial functions in the financial world.

Cutting out the middleman

First and foremost, the decentralized nature of Blockchain technology rules out the need for a central body or third-party to approve and process transactions. As the Nasdaq pointed out in its article published on by Peter Daisyme, most parties act in their own interest.

“The problem, however, is that many of these ‘agents’ have misaligned incentives, in that they are all fighting for their own slice of the profit.”

By using Blockchain technology, vital information can be authorized and shared by an efficient algorithm, free from maladministration.

“Implemented at scale, we can remove the error of human bias and maintain a cleaner, more accurate transactional databases.”

Proving ownership

Ethereum first introduced smart contracts with its Blockchain, which effectively allow contractual parameters to be added to transactions or shared information.

Smart contracts were created to ensure credible, transparent contractual obligations using Blockchain technology, effectively ensuring contractual obligations are met by both parties for the rest of the world to see…

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