Adimo Paranto
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Traditional database technology poses many challenges for recording financial transactions. For example, in real estate sales. After funds are exchanged, title to the real estate is transferred to the buyer. A monetary transaction can be recorded by either buyer or seller, but neither party's source can be trusted. Sellers can easily argue that they have not received payment even if they have, and similarly buyers can argue that they have paid even if they have not.
To avoid potential legal issues, a trusted third party is required to oversee and verify transactions. The existence of such a central authority not only complicates transactions but also creates a single point of vulnerability. If this central data port is compromised, both parties may suffer losses.
Blockchain can alleviate such problems by creating a decentralized, tamper-proof system for recording transactions. In a real estate transaction scenario, blockchain can create a separate ledger for the buyer and seller. All transactions must be approved by both parties and will be updated in real time in both parties' ledgers. Any corruption in historical transactions results in corruption of the entire ledger. These attributes of blockchain technology enable its use in various industry sectors, including the creation of digital currencies such as Bitcoin.
To avoid potential legal issues, a trusted third party is required to oversee and verify transactions. The existence of such a central authority not only complicates transactions but also creates a single point of vulnerability. If this central data port is compromised, both parties may suffer losses.
Blockchain can alleviate such problems by creating a decentralized, tamper-proof system for recording transactions. In a real estate transaction scenario, blockchain can create a separate ledger for the buyer and seller. All transactions must be approved by both parties and will be updated in real time in both parties' ledgers. Any corruption in historical transactions results in corruption of the entire ledger. These attributes of blockchain technology enable its use in various industry sectors, including the creation of digital currencies such as Bitcoin.
