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In October 2008, Blockchain – a P2P network that provides a decentralized public domain where every transaction is recorded between buyer and seller – was introduced as the underlying technology that powered Bitcoin, a virtual currency system that eschewed the need of a central authority for issuing or verifying cryptocurrency and its associated transactions.
Since then, Blockchain technology has been widely accepted as a much-needed technology for startups and big businesses alike.The applications of Blockchain – a transparent verifiable register/ledger of transaction data(or any data of value), provided on a decentralized platform without the need of supervision while still being resistant to fraud – are practically endless.
Why is Blockchain technology so reliable?
In 3 words – Distributed, Transparent & Secure.
Every node of the P2P network verifies every incoming transaction, which becomes a new block of data that gets added to the blockchain. Since it resides on the network, there is no single institution in charge of auditing the data coming through and storing it. Which in turn means, there is no central database that can be hacked.
Furthermore, the records stored are permanent and timestamped to protect the transactions from revisions or edits.
Every dataset or block of data is linked with a previous verified block, this verification can also be done mathematically by each interconnected member of the P2P network, thereby ensuring that no block is tampered with and integrity of each block is maintained.
Consider a customer filling out a Know-Your-Customer or KYC form, for a specific bank.The customer has to fill out the KYC documents each time he requires services from different financial institutions or those institutions have to incur high costs to maintain an intermediary to store and transmit KYC data in a secure way, from a central database.
Hence, banks are unable to easily share customer KYC information in a secure and easy manner, while retaining confidentiality and privacy of customer documents or incurring heavy costs. Resulting in poor customer experience, and high operational costs for financial institutions
If the KYC data is uploaded on Blockchain, financial institutions can securely search for the customer information, generate requests for KYC documents from other institutions that have already verified customers, store validated customer documents and re-use them where required. The blockchain based sharing infrastructure can also be used to trigger alerts on customer profiles which can, in turn, lead to the appropriate mitigation procedures between various financial institutions.
6 Important Use Cases of Blockchain Technology
1) Supply Chain Logistics
Blockchain is well suited for tasks such as tracking goods as they move and change hands in the supply chain. Blockchain opens up several options for companies transporting these goods. Entries on a blockchain can be used to queue up events/arrival of goods with a supply chain.
As moving containers often involves more than 30 different parties, including carriers, terminals, forwarders, haulers, shippers, drivers etc. This process results in hundreds of interactions between those parties, conducted through a mix of e-mail, phone, and fax.
Blockchain provides a new and dynamic means of organizing tracking data and putting it to use.
One of the challenges hospitals face with regards to patient records is the lack of a secure platform to store and share data due to their use of outdated infrastructure and legacy systems. Blockchain technology can allow hospitals to safely store data like medical records and share it with authorized professionals or patients. This can improve data security and can even help with accuracy and speed of diagnosis.
Apart from this, pharmacies and medical devices linked to a person’s health record can now be connected via Blockchain. Data uploaded from a device is all stored on a ‘healthcare’ blockchain that further appends the data on the patient’s record. Prescription drugs bought from pharmacies can also be recorded on this record so that there is a clear medical history of a patient without having to disclose any personal private information about the patient.
3) Real Estate
This is an industry where an average homeowner sells their home every 5-7 years while an average person will move to a new location nearly 12 times in their lifetime. To find information regarding property lines, easements, covenants, conditions & restrictions (CC&Rs), agreements, resolutions, and ordinances is usually a time consuming and laborious process in which it’s easy to miss important information as well as to tamper with it.
Blockchain could help solve these problems. It would expedite home sales by quickly verifying finances, would reduce fraud thanks to its encryption, and would thereby offer transparency throughout the entire selling and purchasing process.
The US election 2016 was not the first instance where certain parties were accused of rigging election results. Democracies all over the globe have undergone some sort of election tampering either with the election booths being rigged, votes miscounted, fraudulent or fake identities being used to gain extra votes, voting systems being hacked etc.
Blockchain technology integration provides the very essence of a democratic government ie its fault-tolerant, every node with access can see the same result, you cannot alter or change a vote once submitted and every vote can be traced to its source while maintaining the voter’s anonymity. Blockchain can provide end to end verifiable voting systems where even if a ballot goes missing or is modified, it can be detected by any voter from any location before the election is over.
By capturing votes as transactions through blockchain, governments and voters would have a verifiable audit trail, ensuring no votes are changed or removed and no fraudulent votes are added.
5) Charities & Non-Profit Organisations
Major complaints from various charities & NPO’s revolve around inefficiency and corruption. Money being redirected away from people who actually need it, there is no proper trace of how the money once donated was used, inappropriate data sharing of funds donated to external parties etc. Due to which, polls have indicated that the public trust in charitable organizations is at an all-time low.
Using blockchain integration, donations can be tracked at every stage and cannot be altered or tampered with. Furthermore, blockchain tech could help these organizations to distribute their funds more efficiently, manage their resources better, and enhance their tracking capabilities.
This ensures that the public will know exactly how charities are using their money at every stage. This is will invariably help build back the trust of charitable organizations in the eyes of the public.
6) BaaS – Blockchain as a Service
Many enterprise software vendors such as IBM, Deloitte, Microsoft Azure, AWS etc have announced Blockchain as Service offerings in which customers can leverage Blockchain in a cloud environment.
Every individual, institution, business, and governments maintain records in one way or another.As we close in on the Internet of Things(IoT) era, we are now collecting data from almost anything whether it’s a mobile app for controlling home appliances or RFID-enabled supply chain to even smart cities. All of this data needs to be organized in a reliable, scalable and secure database.Blockchain-based enterprise software solutions offer just that ie a database that is completely secure, transparent and distributed.
According to one of the world’s leading authorities on innovation, media, and the economic and social impact of technology – Don Tapscott:
“With this global peer-to-peer platform for identity, reputation, and transactions, we will be able to re-engineer deep structures of the firm for innovation and shared value creation. How about these billions of connected smart things that will be sensing, responding, sharing data, generating and trading their own electricity, protecting our environment, managing our homes and our health? And this Internet of Everything will need a Ledger of Everything(ie Blockchain).”
With the current ICO(Initial Coin Offering) craze going on, startups can bypass the rigorous and regulated capital-raising process required by venture capitalists or banks as a percentage of the cryptocurrency is sold to early investors of the project in exchange for legal tender or other cryptocurrencies, usually in the form of Bitcoin.
It is no surprise that apart from established businesses, BaaS providers are quickly capitalizing on entrepreneurs looking to integrate Blockchain technology into their respective business models.
Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved.
In this world, where every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with the least friction without the need of intermediaries like lawyers, brokers, and bankers. This is the immense potential of Blockchain.
(Image credits – atlant.io,followmyvote,rubix,bitgivefoundation.org)