Finance

What is Blockchain? What can be achieved hat and what is likely to be possible

The number of companies and services using blockchain technology is increasing, and it is said to be compatible with cashless services due to its high security and ability to automate the payment process. Let’s take a look at blockchain mechanisms and functions, case studies, and domestic and international trends.

What is Blockchain?

Blockchain is a mechanism that uses encryption technology to synchronously record data (transaction information, etc.) on multiple computers.

A feature of this feature is that multiple computers can manage transaction records on the network, making tampering almost impossible. Update information by connecting “blocks” that summarize transaction records (such as chains). Also called “distributed ledger” in Japanese.

It is managed by multiple computers, so it does not require a large computer. In addition, it is easy to build a highly secure system at a low cost, and it is used in many systems.

Blockchain type

Blockchain can be roughly divided into three types with or without an administrator.

The common type has the characteristics of public type and private type. Public and private types are in sharp contrast, with or without administrators or participants in the blockchain network, and consensus establishment is rigorous.

Blockchain applications

How is a blockchain with this function actually used?

・About payment / certification / contract

People are trying to use blockchain technology for payments, certifications, contracts, etc. Blockchain technology is tamper-resistant, which helps to keep accurate records permanently.

・Business efficiency and automation

Blockchain allows you to automate contracts called “smart contracts”. In other words, if the conditions are met after the contract is signed, the contract will be automatically fulfilled and settled, and the introduction will simplify and automate part of the business.

For example, in trade finance, which is said to be compatible with blockchain, contracts involve a large number of participants and take a long time to complete the settlement process. However, the introduction of smart contracts has made it possible to reduce programming time.

Three Blockchain Use Cases

Here are three examples of companies and financial institutions using blockchain.

Facebook Plans to Release “Libra”

Blockchain technology is also used for “stable coins”. Stable coins are digital currencies with backup assets such as the Japanese yen and the US dollar. Compared to virtual currencies such as Bitcoin, it is linked to fiat currencies, so the price is very stable and the price does not fluctuate significantly. “Libra”, which will be issued by Facebook, is also one of the stable coins.

Mitsubishi UFJ Financial Group Commercializes “Coin”

“Coins” issued by Mitsubishi UFJ Financial Group are also virtual currencies using blockchain. Coins can be used for “1 coin = 1 yen”. At the start of the service, it is expected that Recruit’s Web services such as “Jalan,” “Hot Pepper Gourmet,” and “Hot Pepper Beauty” and the site member store will be used.

MasterCard Automatic Payment System

Major credit card brands have also introduced blockchain technology that can automate the contract process and prevent tampering with contract details.

Overseas Blockchain Trends

The Bank for International Settlements (BIS) reports that about 80{5f3ac39ba1b9031997b955ac72c92bb5456d725b06fa10f02cdda1ab745591c7} of central banks in each country are or will be investigating central banks’ digital currencies.

What is Central Bank Digital Currency?

As the name implies, the central bank’s digital currency is an electronic currency issued by the central bank. Unlike virtual currencies (such as Bitcoin), it is a “legal tender issued by a central bank” and its value rarely changes as much as virtual currencies.

Reasons for digitization of RMB

The People’s Bank of China issues “Digital RMB”. If you turn on your smartphone, you can send “Digital RMB” offline to the other party’s digital wallet, so it can be said to be an upgraded version of QR code payment.

Cambodia Plans to Launch New Digital Currency

Not only China but also the Central Bank of Cambodia will start the actual operation test and launch its own digital currency “Bacon”.

Estonia Introduces KSI as the First Country in the World

Estonia is famous as a digitally advanced country. In 1997, it started promoting “e-government” as a national strategy, and in 2012, it introduced KSI (Keyless Signature Infrastructure) to its production system for the first time in the world.

Japanese Blockchain Trends

In Japan as well, in addition to the coins of the Mitsubishi UFJ Financial Group, Iizuka City, Fukuoka Prefecture has also adopted blockchain technology for its regional management system, and its introduction is progressing.

Summary

With blockchain, you can build a business that was previously difficult. In addition, blockchain technology is indispensable for the cashless society promoted by the government. With the introduction of management services, blockchain technology will become even more prevalent in our daily lives.

Would you like to catch up with this wave and aggressively develop new businesses utilizing blockchain as the related service market expands?