Blockchain: Finally, Life Begins Outside Cryptocurrency
Until a couple of years back, the terms ‘cryptocurrency’ and ‘blockchain’ commonly appeared together in the same bracket, at least amongst people who are not very familiar with the technology. But as tech companies became more aware of blockchain’s versatility, it became clear that cryptocurrency is one of the many subsets of this disruptive technology. Soon, the hype around blockchain gathered momentum and led to the emergence of several best-case uses of the technology other than cryptocurrency.
At present, blockchain has become a buzzword in not just high tech but any industry that leverages software for data management.
Let’s take a closer look at what blockchain exactly is and how its applications have moved far beyond cryptocurrency.
What exactly is blockchain?
Blockchain (sometimes referred to as Distributed Ledger Technology) is a decentralized database of digital assets. It is a distributed ledger that stores and records the history of a digital asset (data) by using decentralization and cryptographic hashing. To put it in simpler words, blockchain is a shared database consisting of blocks of data chained together sequentially as the single-source-of-truth for the information.
Blockchain is composed of three important concepts: blocks, miners, and nodes. Blocks are chunks of data tied together in an irreversible chain. Miners play the role of adding new blocks on the chain. And nodes are any electronic device with shared access to the blockchain, keeping the network functioning.
It is important to note that in blockchain the data is not transferred from one user to another. Instead, it is distributed among all the nodes (devices), thereby creating an immutable record of a digital asset. This decentralization of data creates a secured transparent system where all the parties involved get full real-time access to the data.
Blockchain applications and use cases beyond cryptocurrency
The popularity of cryptocurrency pushed blockchain to become one of the most coveted technologies. Today, blockchain has expanded its roots into various commercial domains and its applications are only multiplying by the day.
Statista reports that the global blockchain market is expected to reach a whopping $39 billion by 2025. As of 2020, it’s the finance sector that leads the way, accounting for 60% of blockchain’s global market value. However, other industries are rapidly catching up in employing blockchain to reap its benefits. One such example is that of the manufacturing sector which accounts for 17.6% of the share.
While the list of different blockchain applications is a ‘blockchain’ in itself, we’ll take a look at its major large-scale applications below.
Blockchain in FinTech: Cross-border transactions and trade finance
Providing frictionless cross-border transactions is an increasingly common application of blockchain in the financial services industry.
The advanced security and transparency in blockchain make it possible for users to transfer funds globally without having to rely on intermediaries too much. Ripple is a great example of how a company can leverage blockchain to offer a decentralized infrastructure for instant cross-border payments.
Blockchain is also exceptionally useful to reduce the risks of fraudulent activities in the trade finance ecosystem. By enabling transparent governance and reducing the complexities involved in the transactions, blockchain unlocks new opportunities for both the banks as well as the customers.
IBM has already rolled out a blockchain-based trade finance solution that has been helping banks not only automate approval processes and trading cycles but also extend services to smaller businesses that are new to the market.
Blockchain in Healthcare: Patient data management and security
Because of the decentralized and immutable storage of data in blockchain technology, any patient data recorded on it becomes impossible to hack. Moreover, transparency in blockchain also ensures that any changes in the data are always visible and trackable. Thus, blockchain in healthcare can ensure nobody tampers with patient data.
Companies like BurstIQ and Medicalchain offer blockchain-based solutions that not only empower patients to have complete control over their medical data but also help healthcare organizations to securely store, manage, and share patients’ medical information.
Blockchain in Public Sector: Ensuring legitimate voting
Among the wide applications of blockchain in the public sector, the most notable one is its use for fair elections. Illegitimate voting, counting errors, and vote tampering are common issues that many major democracies in the world currently face.
A blockchain-based voting mechanism can eliminate all of these issues by ensuring authentic voter registration, secure record-keeping of the votes, and accurate counting free from any human errors. FollowMyVote, a blockchain voting startup, has created an incredible solution that can aid the US to conduct fair elections. Citizens can simply install the software on their device, register an account by identity verification, and cast their vote. Once they have cast the vote, they can also verify that their vote has been recorded as intended.
Considering the potential benefits of blockchain technology, it’s likely going to be used for building the fundamental voting infrastructure in the future.
Blockchain in Supply Chain Management: Transparency & traceability
Traditionally, supply chains employ paper-based data systems to keep track of and trace all the product inventory and transactions. But the scattered nature of such data makes information sharing a lot more complex and inefficient among its stakeholders. This lack of transparency and traceability eventually raises issues like visibility gaps, counterfeiting, and compliance violations.
Blockchain-based supply chain solutions offer a unified view of the data while also allowing the stakeholders to discreetly verify transactions. The technology can be used to design applications that immutably and cryptographically record all transactions in a supply chain. In essence, all the parties involved can access required information on a shared ledger where no single party is the owner, thus bridging the transparency and traceability gap.
With blockchain integration, supply chain companies can record production updates with utmost data visibility. Since all the data on a blockchain system is updated in real-time, companies can also track production status and location at any given time, and share the data with customers for product authenticity.
Blockchain in Cybersecurity: Identity management
The IoT technology has revolutionized how businesses and the teams within communicate with each other. But as the number of users (and devices) grows, IT departments often struggle with user authentication and providing shared access to critical business applications. This calls for an identity management system that’s both trustworthy and liable.
Blockchain enables IT departments to develop sophisticated identity management systems based on decentralized identifiers. Meaning, digital IDs can be created for users as well as endpoints which are then secured owing to the reliability of private/public-key cryptography. While the private key facilitates data decryption, the public key can be freely distributed for user or device authentication.
Additionally, the immutable nature of blockchain technology makes these systems highly secure as all the data is tamper-proof. Also, decentralization of data allows users to get ownership of their identity and transfer it as they desire.
The Bottom Line
The advent of cryptocurrency introduced blockchain as a game-changing technology. However, the technology caught the eye of investors outside the purview of the finance sector and quickly grew in popularity. Recognizing its extraordinary benefits, brands across all walks of commerce are now investing heavily into blockchain in a bid to improve and secure their businesses worldwide.
If you are a business that wants to explore the viability of blockchain for a specific use case, our tech specialists are happy to offer you a free consultation. Just let us know your concerns here and we will help you understand how to make the most of this brilliant technology for your business efficiency.
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