Blockchain was initially developed for maintaining Bitcoin transaction and has applications beyond crypto currencies, and now, it is redefining electronic transactions.
What is a Blockchain?
You can think of blockchain as a distributed data store, shared among a peer-to-peer network, and with built in security and integrity and where trust is enforced by consensus among the participants.
Information or transactions are shared among the parties such that every party gets a copy of the centrally stored information. No one owns the information, but everyone can access it. When someone makes a change to an existing transaction, everyone has to verify and accept the change. Every block is secured with a combination of keys and hashes. It eliminated the need for a third-party to maintain trust.
Blockchain also supports smart contracts, which is a digitized version of a traditional contract. These smart contracts are programmed to self-execute when pre-defined conditions are met.
Ethereum and Hyperledger are the 2 popular open source blockchain platforms. IBM Bluemix based on Hyperledger and Microsoft Azure BaaS (Blockchain as a Service) based on Ethereum, are two commercial blockchain platforms for business.
What are the use cases for blockchain?
Blockchain has applications in healthcare, banking, insurance, retail, education, government and business,
Blockchain will work well in collaborative economies or share economies like Uber or AirBnB where the resources are shared across a closed group. There is already an App called OpenBazaar that lets you trade transparently without any transaction fee. Since it is all transparent, the individual users will be more careful about their reputation management.
Blockchain will be a perfect solution for crowd funding projects. Again because of the transparency in handling funds, such a project will prove to be less prone to frauds.
The healthcare industry can use blockchain to store patient records. This would be an efficient way to centralize and distribute the patient information which can be used by the patient, doctors, pharmacies and the insurance companies. It will be the most transparent and yet secure way to store patient information.
Supply chains will also benefit from blockchain technology. With distributed ledgers, the customers will have a better idea about the stock being transacted.
Just imagine if all those government records are stored using blockchain technology? Tough to crack and quite transparent! All authorized people can access it and modifications can be done only with concurrence of authorized parties. The non-secured information can even be shared with the public which will make the governance smooth and transparent.
Intellectual property violations are quite high these days. Because there’s a large volume of information available on the internet, it takes a while even to realize that the violation has even happened! With blockchain technology, details regarding copyright and content’s intellectual property can be put as smart contracts. This way, more people will be aware of the copyright and violations can be detected faster.
Property titles can also be handled with blockchain technology. The real estate brokers, the mortgage institutions, the sellers and buyers can all save themselves from fraud if property registrations are done using blockchain.
Blockchain technology can be used further in data management, KYC, stock trading, energy grids and more. This technology can even evolve to be an added layer to the internet. The financial services may find this as a disruptive technology as Blockchain and bitcoin together challenge the existing money system.
Who’s threatened by Blockchain technology?
The fraudsters! They are the most threatened as this technology is very difficult to bust. Transparency, time-stamping and majority approval for change, make it very difficult for the hackers to manipulate the system.
Financial institutions may also feel threatened, but the same technology can help them function more transparently, gaining customers’ trust and loyalty.
The brokers and agents may also find it threatening since transparency will expose who’s getting what and from whom! The intermediaries may lose their business because of transparency as the vendors can directly deal with the businesses they serve.