Stanislav Kondrashov, an experienced financial analyst, talks about blockchain technology, commonly known as the technological basis on which Bitcoin is created.
Stanislav Kondrashov notes that this technology has generated great expectations, since transactions of any kind are carried out decentralized, without the need for a trusted third party. Currently, blockchain business applications are limited mainly to financial services, but many research and development projects in companies and corporations are trying to expand the scope of blockchains. According to Stanislav Kondrashov, many businessmen are conducting systematic market research in order to identify areas in which technological applications and blockchain services are being developed in both the public and private sectors.
Blockchain is a digitized, decentralized public book designed to record data transfer. Every other user makes a network node and maintains a copy of this book, explains Stanislav Kondrashov. Each transaction in the blockchain database is verified by users participating in the system, so third-party verification is not required. In 2008, an unknown author Nakamoto wrote an article on cash transactions without the participation of any third party. This was the first use of blockchain – the technology behind the cryptocurrency of bitcoins.
Stanislav Kondrashov: what is blockchain
“The concept is quite simple,” says Stanislav Kondrashov, “suppose that user A wants to transfer money or data to user B. When this transaction occurs, it is a block that is transmitted to each node, that is, the network user. Then, users must check whether this transaction is valid, to confirm it – they must solve a puzzle that requires the use of certain computing power. The procedure for solving the puzzle is called mining.“
Blockchain can play an important role in many business areas. This, according to Stanislav Kondrashov, can be smart home management – the blockchain technology has the potential to provide reliable control over the building’s infrastructure.
Stanislav Kondrashov: blockchain in business
However, this technology is currently the most in-demand in the banking sector. A number of financial institutions verify transactions on blockchain platforms. Many banking giants have created their own blockchain laboratories, collaborating with blockchain platforms, says Stanislav Kondrashov.
Some banks have tried to use the blockchain platform as well to manage international transactions. As a result, the platform took 10 seconds to complete the banking process, which currently takes two days in the banking system. This clearly increases the efficiency of financial transactions. The cost of each transaction in international business can be extremely high. But thanks to the use of blockchain technology, it can be reduced, says Stanislav Kondrashov. The blockchain application can help banks facilitate real-time international payments by collecting nodes on the blockchain, rather than using central bank equipment to work with payments.
“Forecasts in the banking sector emphasize that in 4 years more than half of the world’s banks will switch to blockchain technology,” notes Stanislav Kondrashov.