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Investors familiar with Bitcoin know that Satoshi Nakamoto designed the Bitcoin blockchain as a distributed ledger that can be used to record transactions and token transfers between Internet networks. Many business enterprises and entrepreneurs are now using this concept as a platform for their financial transactions. And by becoming a transaction chain, this financial setup can help a lot, providing easy-to-use and easy-to-pay policies that facilitate clearing and settlement for users. Blockchain settlement is also a sector that many investors are interested in. So what does blockchain settlement mean? Let the editor of the currency circle give you a brief introduction to this blockchain settlement.

 What does blockchain settlement mean?

As a brand-new Internet technology system, blockchain has the characteristics of decentralization, smart contracts, and non-tampering. It has great potential in asset registration, transfer, settlement and payment. It is generally believed that blockchain technology is expected to shape a new Payment and settlement environment, reconstruct the payment and settlement system.

At present, there are still some areas that need improvement in the traditional settlement and payment field, such as large manual business volume, high cost, low efficiency, redundant data, and low fault tolerance, which have become the motivation for the industry to seek improvements.

As the underlying technology of digital transformation, blockchain shows strong technical potential in the field of settlement and payment. It is expected to subvert the traditional payment and settlement operation mode and reconstruct the payment system.

The traditional payment and settlement process is relatively complex, but blockchain technology can achieve real-time settlement and simplify the payment and settlement process. Its core feature is that it can realize value transfer in a quasi-real-time manner without the participation of a trusted third party, allowing both parties to directly interact with data and achieve "transaction as settlement", which greatly reduces risks and improves efficiency. At the same time, the traceability feature of the blockchain can track each transaction and provide more efficient supervision of the payment and settlement process.

 Advantages of blockchain settlement

Blockchain technology mainly operates using principles such as cryptography, consensus mechanism, and data storage. Some people call the blockchain a bridge from the information Internet to the value Internet. It can be said that it vividly points out the value of blockchain in the Internet era, and it also helps us grasp the blockchain technology from another grand perspective. importance and its characteristics.

1. Decentralization: In the traditional financial field, information is stored centrally and must rely on a powerful central organization to organize operations. Blockchain technology ensures that there is no centralized manager in the entire network, and the rights and obligations between nodes are equal. The damage or loss of any node will not affect the operation of the entire system. Fundamentally speaking, there is no clearing step for transactions under the blockchain. Payment and clearing are completed simultaneously.

2. Point-to-point transmission: Compared with traditional information transmission terminals to multiple point-to-point servers, blockchain technology is point-to-point information transmission, and nodes are equal to each other. Under this model, payment settlement no longer relies on traditional intermediaries to provide credit certificates and accounting services, enabling point-to-point transmission of payment information between payers and payers, with stronger stability, reliability and business continuity guarantees.

3. De-trust: Data exchange between nodes does not require the establishment of trust and can operate in accordance with the open and transparent rules of the system. At the same time, nodes do not need to disclose their identities and can trade anonymously, maintaining privacy and security to a large extent so that the information of both parties to the transaction is not leaked.

4. Reliable database: After achieving decentralization and point-to-point, how to ensure the stability and reliability of the entire system data has become the key. The blockchain allows each node to obtain a complete copy of the data in the form of a distributed database. Unless more than 51% of the nodes in the entire system are controlled, modifications to the data on a single node will be invalid.

The above content is a simple science popularization by the editor of the currency circle on the issue of what blockchain settlement means. In fact, in some cases, blockchain, its distributed database and other mechanisms are built to become a global trustless data transmission mechanism, in which no single participant directly or indirectly relies on another participant to transmit value and data. Instead it actually relies on the entire network. Traditional systems are often associated with inefficiencies and delayed value transfers, whereas transfer models like this promise to, by default, eliminate the need for trust and arbitration. This could mean that any party can transact with any other party on the same network without any direct or indirect connection between the parties.