Blockchain, the technology behind digital currency in Bitcoin, has been unleashed. Given the interest in blockchain beyond financial services in the service, transportation, business and government sectors - it is gaining momentum.
Talk chain's potential days have passed and organizations around the world are no longer using it for live applications. From supplying energy and selling assets to managing facilities, sourcing the environment and shipping containers. However, technology remains surrounded by a haze of uncertainty.
In the beginning of Bitcoin
In 2009, following the global financial collapse, an anonymous developer using the nickname Satoshi Nakamoto created an alternative, digital-only financial currency called bitcoin.
Bitcoin has been designed to enable simple financial transactions between its participants, regardless of banking institutions. Each transaction is registered and amended not by a bank, but by the software architecture of the transaction system itself.
This basic transaction technology system is blockchain.
What is Blockchain Technology?
In fact, it's a live book that records the token transactions - in this case, the Bitcoin coin - arranged in data sets known as blocks that use cryptographic authentication to link themselves to one another. Simply put, each data block refers to and identifies the previous block using the hash function, creating an unbreakable chain, hence the name.
This approach to data recording has a significant advantage over traditional ledgers and databases. Because each block of data verifies its direct predecessor, the lengthened count is always continuous and permanent: transactions that have already been recorded cannot be corrected, disguised or deleted. Any attempt to do so will break the cryptographic chain and be immediately marked for all participants.
In principle, a blockchain ledger is a database protected from changes with built-in authentication.
Distribution of obstruction barriers
The other main feature of blockchain is that the library is not kept in one place or managed by a single monopoly third party. Instead, it is said to be ''distributed'', exists on several computers at the same time in a way that anyone with an interest can obtain a live copy of it.
As such, blockchain is sometimes referred to as a "Mutually Distributed Ledger" or MDL. It utilizes this mutual consent mechanism across the network to ensure trust in the entire system.
"Blockchain is based on a distributed, distributed paradigm technology that enables the exchange of any kind of peer value without using intermediaries," concludes Hanan Twizer, IT consulting partner at Grant Thornton Israel.
"The magic here is that you don't need a third party to make sure what happens on a peer network is true."
If you stay with the digital currency concept, it will allow you to send money from one country to another without having to move through a clearing house. Instead of taking two or three days to validate the transaction by a third party, the sender and recipient are automatically identified by their encrypted digital signatures, the money is transferred from one wallet to another and the transaction is registered on the blockchain within seconds.
"With the help of a blockchain," says Hanan, "we can represent any kind of value through tokens. In the financial world that can be a bond or stock, or an asset like a home. The entire network, through its consensus mechanism, is valid. The transfer of ownership transaction.
Any real-world property could be represented as signs on the blockchain. Once a network is created with different factors, these assets are going to be unique. The idea of ownership is really powerful and makes clear to anyone who plays by these rules in the blockchain network.
Applications beyond what is known as "cryptocurrency" were first demonstrated with the development of the Ethereum blockchain platform in 2013. Although the Ethereum ecosystem has its own digital currency known as "sites" as the same token, the platform has shown the ability to include not only basic numeric records. But also small logistical plans for your ledger.
These are called ''smart contracts''.
"These allow you to make arrangements or agreements between parties," says Hanan, "for example, to send funds at a specific time or make changes to a property's assets".
Another classic example of a smart contract in action may be the concept of late airline insurance. When a traveler buys travel insurance for a defined flight, the purchase could be listed on the blockchain. This smart contract is designed to automatically check with an external data source whether this flight suffers from any delay and if necessary transfer payment of compensation directly to the traveler's wallet without the usual administrative overhead.
A number of prominent companies have started using blockchain technologies:
Amazon, Microsoft, MasterCard, IBM and the list goes on.
Types of coins
This need led to the development of electronic currencies in two major utility token & security token configurations. There are over thousands of currencies today, most of which are defined as a utility token that can be converted into a service from the currency issuing company. Currency Impression Increases began in 2017 when a new type of IPO gained momentum in the name of ICO (Initial Coin Offering). Validated by regulators and CPAs, in an offering of this kind provided in a total paper-business plan (white paper), recently this type of IPO has undergone massive change due to investor fraud and bankruptcy of many companies in the field due to the market collapse.
Some of the currencies are tradable if the company is able to register them for trading and some are locked up until the company decides to convert them into service or registration.
Coin mining and energy use
One concern about blockchain is that it is energy intensive. Being the first major technology-based system, Bitcoin is probably the worst offender.
Trust in blockchain is centered on data mining to run the system and for them they earn a fraction of the newly minted new tokens, but the server farms employed in the unending data mining process chew as much energy as a small city. Many of these server farms are operated in China, whose rising carbon emissions are a matter of record.
Add to that the energy requirement of every bitcoin owner to update their wallets in the current version of the digit, to which new blocks are added every few seconds, and you talk about a lot of electricity. It is estimated that a Bitcoin transaction can be 5,000 times more energy intensive than a Visa credit card transaction.
However, these costs are offset by the fact that blockchain allows for real-time transactions and information sharing, hence, low mediation costs compared to normal operations such as bank transfer and waiting time for money / information.
Blockchain department services and crypto currencies
We offer a comprehensive solution in blockchain technology services, from concept and strategic design to manufacturing and implementation.
Our expert technical, legal and strategic advisors help our clients fully integrate the technology into their business and thus facilitate entry into work versus all other market customers.
Here are our services in the field:
- Formulation of an accounting strategy - integrity in the accounting statements and the logic of the operations performed in the companies electronic wallet.
- Smart contract technical analysis.
- Technical analysis of smart contracts code in Initial coin offering (ICO) financing activities.
- Guarding and protecting company currencies.
- Annual cash flow planning based on currency fluctuations.
- Accompanying financing transactions / assets made using electronic currencies.
- Preparing reports on the impact of currency in various industries.
- Development and implementation. We identify the best business model for our client, we analyze, evaluate and validate usage from accounting and technology perspectives.
- Organization finance department training: We provide training and accompany the finance department in the organization on how to report actions that can be reported to the authorities.
- Fund account automation applications.
Our added value
Professional and personal service based on senior staff in the department.
Quality service to international standards and use of advanced methodology.
Performing projects and work around the world with the help of local experts from the member offices of the Grant Thornton International Network where we are members.
Hanan Twizer, CPAContact us