The term “blockchain technology” has been applied to countless fields. It has aided corporations in expanding their horizons. It has also contributed to convenience, cost savings, and security. However, whether an organization is new or already up and running, trust forms its core. At any point, no organization can compromise on trust. Blockchain technology exposes corporate enterprises to security breaches because it opens the door to technological simplicity. Therefore, it becomes of utmost importance for expanding businesses to rethink their idea of adopting blockchain.
After the Snowden revelations, a growing lack of trust in governmental institutions, including those in democracies like the United States, as well as in major online platforms like Facebook, Google, and Twitter that have been complicit in such abuses, has emerged. These abuses include public coercion, disinformation dissemination, and surveillance.
It means in order to get any technology use within an organization, it is prime to check either it is suitable for the foundation i.e., trust or not. We are living in a world that works pro-actively. It is no more acceptable for businesses to introduce any technology without a prior checks and handling its consequences afterwards. It means the technology itself has to do some improvements regarding trust issues, itself.
For the newbies, which aren’t aware of blockchain technology lets get a brief overview about this technology.
What is Blockchain Technology?
A sophisticated database system called blockchain technology enables transparent information sharing inside a company network. Data is kept in blocks that are connected together in a chain and stored in a blockchain database. A peer-to-peer network’s decentralized ledger of transactions is known as a blockchain. With use cases including payments, derivatives, settlement, securities, syndicated lending, trade finance, and more, it might provide financial services firms with a more efficient approach to managing a wide range of activities.
A blockchain is fundamentally a ledger of transactions, just like a conventional ledger. Any movement of money, products, or secure data, such as making a grocery store purchase or getting a government identification number, might be considered one of these transactions. With the use of blockchain technology, data is stored in a way that makes it nearly impossible for anyone to add, remove, or modify information without the knowledge of other users.
Blockchain eliminates the problems by developing a decentralized, unchangeable mechanism for transaction recording. Blockchain generates separate ledgers for both the buyer and the seller in the case of a real estate transaction. All transactions are subject to both parties’ approval and are automatically updated in real-time in both of their ledgers. Any tampering with earlier transactions will taint the entire ledger. These characteristics of blockchain technology have made it useful across a range of industries, including the development of virtual currencies like Bitcoin.
Blockchain and Trust
Trustworthy technology is the new need of the town. Blockchain has been a word of the town since a decade ago. It’s difficult to ignore the irony that a technology whose main objective is the maintenance of trust could have ended up the target of such a great deal of mistrust.
A blockchain ecosystem is typically made up of partnerships between large corporations with the goal of increasing the effectiveness and transparency of asset transactions. It shouldn’t come as a surprise at this time that blockchain is included among the top 10 strategic technology trends for 2017 by market analysts at Gartner. However, one must also keep in mind that, despite its potential, this technology is still in its infancy. The world as a whole is not yet prepared for the technology because we lack the necessary computational power.
On the other hand, well-known financial service firms are attempting to benefit from blockchain technology and have already invested $1 billion in it. According to industry statistics, savings in banking infrastructure of between €13 billion and €18 billion might be made by 2022. Additionally, Bitcoin is open-source software that can benefit all market participants with the development of blockchain technology. On the consumer side, the situation is similar; according to a BearingPoint survey, 80% of consumers find virtual currencies to be popular, but just 5% actually use them. Not just financial services companies, but all market players should use this as a wake-up call.
No matter what purpose a public blockchain serves, when it operates as intended, it reduces the principal-agent issues (such as moral hazard and shirking) that are typical of trusted partnerships. Due to this, many people now refer to blockchain as a “trustless” or “trust-free” technology.
What Blockchain Can Do to Ensure Trust to Its Users?
To gain the trust and to ensure the users the ultimate security, it is now the blockchain that has to do some moves. The blockchain offers new promise in a time when confidence in institutions of all types is eroding: shared ledgers of information that everyone can trust but no one can control. It is now necessary to adapt to a new framework for commercial relations, which in the coming ten years might replace traditional forms of economic trust.
Experts believe that the technology has to make certain developments which should create confidence among its users.
A transaction must be registered in a block in order for it to be validated. The block is then added to chains that are privately preserved after validation. Data can be synchronized across all chains because they all feature the current distributed ledger and are similar. A transaction cannot be altered after it has been recorded on the chain since doing so would result in an inconsistency between the block hashes of the separately maintained chains. Since each member has a copy of the full blockchain, any manipulation will be immediately apparent. All parties can trust their records when the hashes match up throughout the chain.
Blockchain is expected to assist developers to address the security and scalability issues related to the Internet of Things (IoT). IoT devices frequently have security flaws, which makes them a prime target for cybercriminals. An interoperable chain with a higher level of encryption can be provided via blockchain, making it nearly hard for attackers to replace current data records.
The next field is to handle the supply chain aptly. For this, Redesigning Trust, a toolkit for blockchain deployment recently created by the World Economic Forum, claims to be able to help businesses “through the development of a new blockchain solution.” The kit offers businesses working on blockchain initiatives tools, resources, and knowledge as a result of more than a year’s worth of collaborative work by 100+ leaders. It was created using the lessons learned from an analysis of actual projects in order to assist enterprises in implementing best practices and avoiding potential pitfalls while using distributed ledger technology.
What Is Limiting Blockchain?
A blockchain-based network might initially seem to function in a predictable, self-contained manner, free from the influence of outside parties. However, these networks actually consist of a mix of social and technical components and are hence hybrid systems. Because all “artefacts have politics,” the notion that technology can be created to be completely impartial, unbiased, or apolitical to currently existent human-led institutions is absurd.
In the case of a blockchain system, the attributes of decentralization, censorship-resistance, tamper-resistance, and automation — which all work to increase the level of confidence in the system — necessitate a certain level of trust to be placed in a variety of human actors, which operate both inside and outside the system. This might not be immediately obvious to the typical blockchain user, such as the user of a crypto-wallet, who is said to be in a confident state. Trusting the network’s entire cast of characters eventually entails having faith in the system.
It means in order to earn full confidence and trust of the users, it is very much necessary that the technology itself introduce that limits the political or state-level interferences that are limiting its full potential.
Frequently Asked Questions
How Does Blockchain Support Trust?
Blockchain uses a hashing strategy that typically adds cryptographic texts to the block. Since each member has a copy of the full blockchain, any manipulation will be immediately apparent. All parties can trust their records when the hashes match up throughout the chain.
Is Blockchain Safe And Secured?
Yes, it is. A blockchain is protected by a high level of encryption to safeguard each exchange and transaction that occurs on the network which makes it a safe technology.
Can You Connect Trust Wallet to Blockchain?
As blockchain and bitcoin has been used to assist transections, access to numerous DApps created on the Ethereum blockchain and the Binance Smart Chain is made simple with the help of Trust Wallet. This implies that you don’t need to log in to use the DApps on the Trust Wallet mobile app directly.