Information Systems Integration – Tony Messina

Blockchain Technology

Blockchain photo

 

Technology is always evolving. Blockchain Technology is something created from the always evolving technology. Blockchain is an open, decentralized ledger that records transactions between two parties in a permanent way without needing third-party authentication. This technology is expected to dramatically reduce the cost of transactions. Many entrepreneurs are invested in blockchain and nearly 15% of financial institutions are using it. One example of a company that has its own blockchain technology is Ripple, which is based in San Francisco. Ripple has partnered with a few banks to use its blockchain technology. If a bank were to use Ripples blockchain technology along with its digital asset, which is called XRP, then it could settle payments in 4 seconds. This is a huge time difference because traditional systems will take between 3-5 days. This could lead to companies being able to process a lot more transactions daily. I personally see this as something many more companies will start to use eventually.

Do you think that more companies will use this technology in the future? Feel free to comment below.

3 Responses to Blockchain Technology

  • I agree with your statements on blockchain. I think that more and more companies will start to adopt blockchain technology. Blockchain technology is still emerging, but companies are already starting to adopt it, such as the 15% of financial institutions that you mentioned. This leads me to believe that the adoption of blockchain will continue, especially in the financial services industry. Financial services seems like the industry where blockchain will have the most impact. According to Deloitte, a few of the impacts that blockchain technology may have on the financial services industry are “speeding up and simplifying cross-border payments, increasing accuracy and shortening the settlement process of share trading, implementing smart contracts, and improving online identity management among others.” These are the reasons that I believe that financial services companies will increasingly use blockchain.

    Companies like Ripple will become more and more prevalent. Large and small companies will keep developing blockchain use cases to help develop blockchain solutions that will improve business processes. However, I think that there is some speculation around blockchain and how widespread its effects will be. Blockchain will not radically change businesses immediately.

  • Although I think the idea of blockchain technology is innovative and has many benefits I don’t see many companies using it in the future unless it develops some sort of stability. The value of coins is constantly changing and if drastic drop were to occur the value of that money will drop if physical currency is still driving the value of coins. The speed of transactions would certainly increase and benefit companies that are doing many exchanges a day. The popularity of blockchain technology can become more popular in the future if some sort of governance surrounds it to ensure the value of the money.

  • Blockchain technology has many different applications and supporting banking transactions is definitely one of the most popular. Right now most blockchain technologies are in the proof of concept stage and even Ripple has struggled here. The original coin, based on blockchain technology, Bitcoin, has been around since 2010 and it has experienced the volatility that Jurgen mentioned. There is also a large number of coins that are released that are created just for a pump and dump, grab the cash and go scenario. Blockchain technologies have a long way to go before they are 100% trusted and adopted by larger financial institutions. As far as using these coins for a form a currency, I think their price will have to stabilize for a few years before this can happen. Think about it. If you were getting a weekly paycheck in Bitcoin you would have been happy a few months ago when it was trading at nearly $20,000 per bitcoin, yet just a few weeks ago it was near $6,000 per bitcoin. In less than a few months your paycheck was cut nearly 70%. Another thing to think about is the fact that ALL blockchain technology relies on some sort of computing power and that requires electricity. In order to remain profitable to run these blockchain “miners” the cost to mine has to be much lower than the cost to operate. There are already many coins out there that are no longer profitable to mine so less and less people are mining them, therefore driving transaction times up and slowing down the blockchain to the point where no one wants to use it. I think in the years to come we will see the thousands of coins and blockchain technologies come down to a few crucial powerhouses like XRP, ETH, ADA, BTC and LTC.

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