What is a blockchain that will revolutionize business customs, social systems, and work practices?

 

There is an increasing movement to utilize "blockchain", which is a technology born as a basic technology of virtual currency, for various transactions and contracts. Banks, real estate companies, trading companies, various agencies, copyright, and patent management organizations, factories, medical institutions, and governments. It is expected to be used by institutions and companies that support social movements. Blockchain is a technology that changes the foundations of traditional business practices, social systems, and work practices. It is expected that the utilization will dramatically improve operational efficiency and create new value.

Research firm IDC Japan predicts that the global blockchain-related market will grow by an average of 73.2% annually between 2017 and 2022, reaching the US $ 11.7 billion in 2022. In particular, Japan has a high growth rate, and it is said that it will grow at an annual rate of 108.7% during the same period. Moreover, the effect can even be tens of times greater, including markets that are indirectly affected by blockchain.

Fundamentally changing the way of transactions and contracts that are indispensable to modern society

In business and life, various transactions, contracts, recognition, and transfer of rights are carried out between people, companies, and companies, or companies and governments. These are all tasks that require some kind of consensus-building and are indispensable elements for business and social activities. Whether you're buying products online, enrolling in school, or buying or renting a home to live in, you'll have to build some consensus.

Generally, transactions and contracts are established by creating a document that summarizes the conditions and precautions, and stamping or signing when mutual conditions are agreed. However, in many cases, we seek the endorsement of an undisputed third party with undisputed credibility and authority to prove that the agreement reached is valid. This is because we are worried that the person with whom we make a deal or contract is reliable. For example, in the case of real estate, a licensed real estate company must conclude a contract and register it at the Legal Affairs Bureau to certify the right. If any trouble occurs, a third party who has endorsed it will mediate or show the way to solve it.

However, if you use blockchain, you don't need to be endorsed by a third party. This makes it quicker and easier to reach consensus-building tasks. The modern social system is built on the premise that third-party organizations such as banks, trading companies, and governments will mediate when proceeding with transactions, contracts, and recognition of rights. The impact of eliminating the need for this mediation is enormous and can even radically change business habits, social systems, and the way work is done.

If everyone watches over, you don't need an endorsement

Then, what kind of technology is the blockchain that has the potential to completely change the structure of society? Information processing expertise may be required to understand in detail. However, it is not always necessary to have a deep understanding of the technology in order to know the merits of applying it and the points to be noted when using it. Here, I would like to introduce only the essence of the mechanism and features that you should know at a minimum.

The technology called blockchain is a technology devised to meet the needs of realizing virtual currencies. To explain the purpose in one sentence, it can be said that "using the mechanism of the ICT system, it is possible to carry out safe and reliable transactions and contracts without a third party." Then, in order to eliminate the need for a third-party institution, we have adopted a method in which information on transaction history and contract details is recorded in an electronic ledger one by one without being obscured, and this is made public and shared. In other words, it is extremely democratic, saying, "If a transaction or contract is carried out while everyone is always watching, and the majority of people watching it justify it, it is safe without the approval of a third party." The idea is the basic concept of the blockchain.

Four benefits of using Blockchain 

Blockchain has four major merits that have not been available in previous transactions and contracts. 

First of all, the biggest feature is that there is no need for a third party for transactions. This allows sellers and buyers to trade directly. Transactions without a credible third party may seem uneasy, but they do have a lot of benefits. For example, trading through a third party requires extra costs and processing procedures. Typical costs include bank transfer fees and real estate brokerage fees. This is gone. In addition, the process of justifying transactions at third-party organizations is often black-boxed. For example, in a mortgage loan examination, it is often unclear what kind of examination process and judgment will be used to decide whether or not to lend. In transactions and contracts involving interests, the third party itself can be a hotbed of fraud. By utilizing a blockchain-based on ICT system with minimal human intervention, waste and anxiety can be minimized.

Secondly, you can "automate transactions and contracts." Until now, when dealing, contracting, certifying rights, etc., it was necessary to prepare documents such as invoices and invoices, and to settle manually by an authorized person. If you use the blockchain to program the conditions for establishing transactions and execution procedures, and programming all the series of operations such as condition confirmation, fulfillment, value transfer, and settlement, you can quickly make transactions and contracts without human intervention. You can proceed. It is even possible to automatically trade between machines without any human intervention. Automatic transactions and contracts using ICT systems are called "smart contracts".

In addition, "reliable traceability can be achieved". In the blockchain, the contents of transactions and contracts that occur within a certain period of time are encrypted and recorded together in a block called a block. And every time a new transaction or contract occurs, the new block is chained after the previous block. This technology is called a blockchain. When connecting new blocks, you can put a digital tally between the blocks so that no one can change the order or rewrite the information. Therefore, only a reliable past record remains, and you can go back and check the history.

Then, you can "build a database that is resistant to system failures and cyber attacks." ICT systems that utilize blockchain do not have a centralized computer with powerful authority to control the entire system. Every computer that participates in the operation of the blockchain has the same role. Therefore, if a part of the system fails, it will not go down if the others are normal. Also, in the blockchain, all new transaction data is encrypted and all previous transaction history is added to the recorded data. Therefore, if you try to tamper with past data, you have to rewrite all the data after that. In addition, it is necessary to rewrite the records of 51% or more of all computers participating in the system operation. For this reason, it is virtually impossible to tamper with it.

With the advent of a distinctive derivative version, it supports the expansion of application

Blockchain is a technology originally devised to realize a virtual currency called "bitcoin". Due to growing expectations for the expansion of applications, derivative versions for various purposes have appeared. There are four features of the blockchain, and improvements are being made to make some of them stand out according to the purpose of use.

For example, the feature that a transaction can be completed without a third party may actually cause inconvenience. We cannot completely deny the current social structure and business customs that utilize banks, real estate companies, and governments. Blockchains that do not require a third party are sometimes called "public chains". A form in which a specific group or person manages a computer that participates in the operation of a blockchain is called a "private chain", and a form in which multiple groups of people manage a computer is called a "consortium chain".

 In addition, a derivative version that enables management of ledgers even on low-performance computers and a derivative version that is easy to use for smart contracts are also used. By properly using blockchains with different features, their applications will continue to expand.