Trust is precious. All trust pillars like banks, government, or temples charge huge money for every transaction. It is also manual, isolated and vulnerable to hacking. Let’s take two simple examples – Flat sale between two people needs lease deed documents and whole day of government harassment. Or, take letter of credit (LC), when two banks are involved, just to give comfort to a buyer and seller. Government or bank are trust pillars and changes in these institutions are difficult because of excessive controls.
Trust is a costly affair. Can we bypass these middlemen and have more trust same time?
Yes.. Block chain is the answer. Block chain is a connection of millions of computers. Transactions like buying -selling can take place on it between the parties. Every ten minutes a Block will get generated. It will be secured by the crypto techniques/codes. Next ten minutes, new transactions will be further recorded and then these blocks will be linked in time frame. In summary, block chain is a distributed ledger of assets and transactions. It is transparent. All encrypted computers will store and share this information.
To simplify, it is like Wikipedia where information is being stored, validated, reviewed, and updated in real time. History of assets is easily available. At present, same asset can be misused to create multiple liabilities. In block chain, it is not possible. It is like Indian marriage, where the contract between two people is widely acknowledged and viewed by the society. It is stored in time stamped block.
This technology should kill the middleman. It would bring transparency. It may demolish bad nexuses of businesses –bank- share market-politician. Assets will be rightly valued and tagged. Chances of fraud will reduce. Banks and Governments are running big biased trust centres (power centres) which has created huge in-equalities. Block chain is the system by the people and for the people. Two people can share their assets and liabilities and get right value for their product and efforts.
Music or patent will be big beneficiary. Piracy may reduce. It can’t be hacked and it is encrypted and each block has different code. Let’s see new financial transactions which will be technology driven.