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While cryptocurrency has won all the titles of the last few years, the blockchain technology that underlies it probably deserves more attention. Many people see blockchain as simply serving the purposes of Bitcoin and other cryptocurrencies.
In reality, however, blockchain has many more uses. Already, many sectors have adopted – or at least are in the testing phases of how it can transform the way in which the daily processes that involve data perform.
Blockchain is an incorruptible digital master book that operates outside a centralized framework. It keeps track of each cryptocurrency transaction, adding other threads (or "blocks") for each transaction made.
Each of these blocks contains a cryptographic timestamp, so that they can be easily identified and verified. Blockchain is commonly discussed in a financial context. However, it can be used to record more than just transactions, but practically anything of value.
The blockchain database is public, so it is accessible to anyone. However, unlike other public records, it is not stored in a central location, but is hosted by millions of computers simultaneously.
Because it is not controlled by a single entity, it does not have a single point of failure. Each transaction is registered on a distributed system of registers connected to a secure mechanism. This greatly reduces the chances of hackers manipulating information or two users accidentally overwriting the same record at the same time.
Because of its incorruptible nature, the Blockchain database provides a pure record of information that has the highest degree of responsibility, since no transaction and exchange takes place without the consent of the parties involved. This ensures that there are no human or mechanical errors and that it helps to guarantee the validity of a transaction.
Blockchain performs an automatic self-audit every 10 minutes, to capture and update the record with new transactions at regular intervals. In this way, the Blockchain network lives in a state of consensus and is managed by a vast network of computer nodes that could be replaced only with an unprecedented amount of computing power.
Blockchains are made up of three technologies:
- Private key cryptography – this allows the creation of digital signatures by private key owners (who are kept secret) and verified by anyone with a corresponding public key.
- P2P network – a database comprising information systems connected online. Files can be shared between these systems without the need for a central server.
- Program (the protocol of the blockchain) – block records are linked via a predetermined protocol; a program that is the backbone of the blockchain network software.
Like any technology, blockchain has its limits. Lack of regulation creates a risky environment in which scams are on the agenda. It is also extremely complex and users need to understand the complex ways in which cryptography works to appreciate the key points of the blockchain. Finally, it can be slow and cumbersome, sometimes using hours to finalize a Bitcoin transaction.
Obviously, blockchain is working on its problems as it hopes to expand its growing user base. Let's take a look at how the blockchain is making significant strides in these important areas.
Banking and financial sector
One of the original principles of cryptocurrencies was to circumvent the traditional financial institutions that acted as intermediaries, so it is not surprising that the banking sector is very active in exploring how it could transform their business model. Simplifying and speeding up transactions has been estimated by Accenture in a special relationship that could save up to $ 20 billion by 2022.
Blockchain can be particularly useful in processing cross-border payments, because it can avoid exchange fees applied by an intermediary. It is also a reliable cover against the dangers of money laundering.
"We think the identity could be great," says Simon Whitehouse, who is working with the UN and Microsoft on a blockchain identity system for undocumented people. "We can easily see how you can move this into the vast area of" know your client "and anti-money laundering, where the costs are huge for the banks and even the costs of messing up are huge."
Grocery stores
This may not be one of the first areas that one would think would be delightful in blockchain technology, but already there is a great deal of interest – particularly because of the competitive advantage that larger chains can offer.
Walmart has been experimenting with IBM to use blockchain to track food from their original supplier. At a time when provenance and sustainability are more important than ever for consumers, the fact that each step of a product's journey can be traced is a great reassurance – not just for the freshness and the source of food that consumers they buy, but it can also help to identify where waste may be present and help to reduce or eliminate it.
Gambling
Initially, online casinos were reluctant to take cryptocurrency and blockchain simply because the regulations made them impossible to adopt. In the UK, the Gambling Commission has previously warned players about digital currencies and argues that traders must adhere to anti-money laundering measures as they identify and verify customers and ask for their sources of funding when they deposit large sums of money.
In the world of cryptocurrency, everything is anonymous, so it is impossible for them to be used to gambling. The Gambling Commission is not afraid of stealing license traders for breaking the rules – so it is in their interest to stay firmly away from the cryptocurrency. Visit a trustworthy site like the 888 online casino and find only the established payment methods.
However, non-existent casinos are stirring things up by embracing the world of cryptocurrency games. The heart of the currency itself is a token that has been specifically developed for casino use as it allows transparency and eliminates the "advantage" of the casino by maximizing potential payments for players. Players sign up for smart contracts, which is a contract between two people or entities that do not require third-party validation. Among the gambling advantages for the players are:
- Transparency – Blockchain technology has a fairness standard and players can access all data held by the casino.
- Peer-to-peer game – through smart contracts, players can play with others using a betting exchange with rules of their choice.
- Piles fairer – in the absence of transaction fees, players do not have to pay as much as to deposit or withdraw money, which they can do at the moment.
- Evaluation of the value of EDG tokens – the currency, like Bitcoin, can potentially earn more money for the players. From March 2018, the EDG token increased the value by 500%.
Real Estate
Anyone who has ever bought or sold property will know exactly how complex it can involve real estate agents, lawyers, councils, land registry and countless other interested parties. This makes the process complex, expensive and time-consuming, even in simpler and simpler transactions. So the real estate sector is actively exploring how smart contracts could act to bring all of these together in order to make things much easier.
In an ideal world, a digital signature of the buyer and seller and the property to be registered on a centralized system would suffice. So all the other elements necessary to proceed with the sale could be generated automatically. This would save time and be a completely safe property transfer method – so it is perhaps inevitable that the land registry records are experiencing it.
Government
Governments must be accessible, accountable and open – so blockchain has a number of specific roles to play here. For example, the recent elections turned out to be controversial, not more than the middle ones, where in Georgia alone there were 100,000 missing votes. Many governments are actively examining the use of the secure blockchain system to avoid problems like this that occur in the future, which can greatly affect their mandate and ability to govern. An additional advantage would be the speed at which votes can be received and counted in this system.
Governments also have a huge amount of so-called "open-source" data. This covers a multitude of topics including health reports, business data and even time analysis – all of which are of great use to everyone, from parents to farmers. Through the use of blockchain as a public ledger, there is the possibility of making this information permanently available.
Health care
The complex health care field is another area in which the blockchain is used to make operations more efficient. This ranges from secure storage and transfer of confidential medical records, to billing for medical treatments and services, as well as to liaison with insurers responsible for their payment.
The digital register of the blockchain can play an important role in the management of general practice, in the management of test results, in compliance with the regulations and in the prescription and in the ordering of drugs.
Patientory is one of the companies that is currently developing a blockchain-based platform to store health data for patients and suppliers. Blockchain technology is the foundation of its app, which offers patients an easy way to monitor hospital visits, medical expenses and treatment.
Insurance
Our final category is the broad field of insurance. One of the biggest challenges it faces is the identification of false or fraudulent claims. In fact, it is estimated that they cost the world industry $ 80 billion a year. However, the use of a digital blockchain register of cryptographically and transparently secured articles, policies and complaints will make it impossible for them to hack or counterfeit, reducing fraud levels in one fell swoop.
At a broader level, the transfer of contracts and policies will be made easier, faster and safer, even when insurance is organized for other parts of the world. Insurance companies are increasingly overwhelmed by the data they need to manage. Blockchain can handle, share and monetize large amounts of data correctly – this is just one of the ways that blockchain is useful in the industry.
So while these are undoubtedly the early days for blockchain technology, its potential is almost endless, especially with the Internet of Things advancing at such a high pace. As for the fact that it will make all the more traditional forms of transaction obsolete, many are looking ahead with great anticipation and interest.
