TECHNOLOGY
HOW THE
BLOCKCHAIN IS
TRANSFORMING THE
WORLD OF FINANCE
The blockchain is an emerging and disruptive technology that’s
revolutionising the financial industry. Sonya Kuhnel, founder and MD of the
Blockchain Academy in South Africa, looks at some of the technology’s use
cases, and the tax implications and regulation of bitcoin in South Africa.
THE BLOCKCHAIN IS A DIGITAL,
DISTRIBUTED TRANSACTION database
or ledger. It’s best known as the technology
behind bitcoin, storing all bitcoin
transactions as well as transactions of
other types of cryptocurrencies, such as
ether. It’s a write-only database, which
means data can only be added and not
edited or removed.
The blockchain is decentralised, meaning
it’s not stored in one location or controlled
by any central authority. Multiple identical
copies of the blockchain are stored and
maintained, so the data on the blockchain
is resistant to any single point of failure,
and can’t be forged or destroyed.
Cryptography protects all transactions
recorded on the blockchain.
Bitcoin: digital currency or investment?
It’s entirely your choice. As a digital
currency or cryptocurrency, you can send
bitcoins to anyone anywhere in the world
at any time – without the need for a bank
account. Some merchants also accept
bitcoin as payment.
As an investment, bitcoin is very volatile
and therefore a high-risk investment with
the potential to offer high returns.
What the blockchain can do for the
financial industry
Beyond bitcoin, the blockchain has
many other possibilities. Many major
banks around the world are researching
blockchain-based technologies to build
trust, and improve and streamline existing