Many believe that cryptocurrencies are a scam. Some believe that it’s another Ponzi pyramid. A strategy to attract investors and then take away all their money. However, people who say that don’t know exactly how cryptocurrencies work. Believe it or not, cryptocurrencies and blockchain technologies are the future and they are here to stay.
Blockchain technologies represent the decentralization of many important processes, such as banking transactions. For many years, the SWIFT system, through its payment mechanisms, Visa and MasterCard, has absolute control of international inter-bank transactions. However, thanks to blockchain, today the whole humankind knows that banks aren’t the only ones capable of transferring money between different countries.
The Internet has allowed people from all over the world to interconnect and share data of any kind. Electronic money is a type of data, which means it can be transferred thru the Internet. Obviously, you wouldn’t send your money to someone else as you would send an email. On the web, there are millions of expert hackers to extract information from users. If you want your data to not fall into the wrong hands, encryption is the best solution.
Encryption is converting any type of information into an incomprehensible string of characters. This string is encrypted through an algorithm. To decode the encrypted message, the third party receiving the information needs the secret key of the algorithm. For hackers, deciphering a secret key is almost impossible. The only way for a hacker to have access to your password is by accessing personal files on your computer.
For that reason, it isn’t recommended to save keys in disk drives or cloud-based services. It’s better to record all the data of your wallet on a piece of paper and keep it in a safe place. Sometimes, the most complicated problems require the simplest solution.
Nowadays, blockchain technologies can be implemented in any process where the information or the identity of the users needs to remain anonymous. For example, during voting processes.
Today, many countries maintain their old manual vote counting scheme. Many say that it is the safest thing, but always where the human factor is present, the chances of error are high. If counters are wrong or the boxes with the votes disappear mysteriously, the final numbers won’t be correct. Voting processes around the world sooner or later become corrupted, especially when regulatory institutions obey orders from third parties.
Electronic voting systems also have their own security flaws and anyone who knows the machine’s coding can access and modify the data. If electronic voting processes used blockchain technology to encrypt the information, even the most experienced hackers couldn’t modify the vote count.
As we can see, the more people are involved in the process of counting and auditing votes, the system can always be manipulated to favor a certain side. A problem that would disappear with a simple change of technology.
With the implementation of blockchains in voting processes, there would be no valid reasons to justify a possible electoral fraud.
Kamran Gasimov is an adviser to the Chairman of the Board and Director of Creation of Bank Products and Development of Sales Channels at MuganBank OJSC. He also is a Co-Founder and Development Director of Accounting and Tax Resources and the Founder and Director of Richmond Group.