Eoin Treacy's view -
In contrast to today’s transaction networks, distributed ledgers eliminate the need for central authorities to certify ownership and clear transactions. Distributed ledgers can be open, verifying anonymous actors in the network, or they can be closed and require actors in the network to be already identified. The best known existing use for the distributed ledger is the cryptocurrency Bitcoin.
Distributed ledger Technology has several attractive features:
Transactions can be made to be irrevocable, and clearing and settlement can be programmed to be near-instantaneous, allowing distributed ledger operators to increase the accuracy of trade data and reduce settlement risk.
Systems operate on a peer-to-peer basis and transactions are near-certain to be correctly executed, allowing distributed ledger operators to eliminate supervision and IT infrastructure, and their associated costs.
Each transaction in the ledger is openly verified by a community of networked users rather than by a central authority, making the distributed ledger tamper-resistant; and each transaction is automatically administered in such a way as to render the transaction history difficult to reverse.
Almost any intangible document or asset can be expressed in code which can be programmed into or referenced by a distributed ledger.
A publicly accessible historical record of all transactions is created, enabling effective monitoring and auditing by participants, supervisors and regulators.
Commercial banks, central banks, stock exchanges and major Technology providers, such as IBM and Samsung, are all exploring the potential uses of distributed ledgers. Fintechs, such as Ripple, Ethereum, Eris Industries10 and HyperLedger, are also developing new ways to exchange data and assets enabled by the Technology. It is only a matter of time before distributed ledgers become a trusted alternative for managing large volumes of transactions.
Contracts, transactions, records of ownership and trade can all be streamlined through the development of blockchain Technology. In an environment where internet security is an increasingly pressing issue, there is little doubt that this is a sector which will become a major part of global legal and financial infrastructures over the next decade.
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