Blockchain is one of the most intriguing technologies that has emerged in our lifetime. The possibilities it brings to various industries are endless, as the technology can be used for many purposes. Blockchain completely changes the game for industries when it comes to how information is stored, shared and secured.
Let’s review some key possibilities of blockchain.
First of all, Blockchain is decentralised
What does that mean? Decentralised systems are something that both individuals and corporations can benefit from, as they provide a more secure and efficient system for storing data.
These days, organisations use middlemen or business processes to verify that a piece of data is true. With blockchains, this work of checks is delegated instead to cryptography and code. It’s done by providing a shared ledger that we can trust.
People have relied on ledgers for a long time, a blockchain ledger is different from the entire history of ledgers because no one owns it. There is no authority, no one owns or keeps your data, hence no one can influence or speculate on the information.
There are no central points of failure, and the network is more resilient to attacks. As well as this, the transparency of these systems means that there is no need for trust between parties in a transaction: everyone has access to all relevant information at once.
In simple terms, each new block connects to all the blocks before in a cryptographic chain in such a way that it’s almost impossible to hack; information and transactions within the blocks are validated, agreed and locked. There is no way to go back to previous blocks and change the information.
However, how exactly can blockchain be used to make data sharing and storage more secure? As described above, it is done by eliminating the need for third parties or intermediaries. For example, instead of each doctor having a separate copy of your sensitive health information, it would all be stored on a secure distributed ledger that only you control.
Use of decentralised systems - Identity Verification
Blockchain technology is a secure way of verifying identity without the need for a central authority, and without the need to disclose all your private details to prove that you are you.
In this system, each user has their own unique key pair (public and private), and you can only access someone’s private key with their permission. The blockchain then uses these keys to verify whether users are who they claim to be. This lets companies verify data from users without sharing personal information like credit card or social security numbers – a major benefit over traditional databases that require lots of personal information for your account.
To sum it up in simple terms, your unique key (code) verifies your identity without uncovering your personal details.
A game-changer tool - Smart contracts
A smart contract is an agreement that can be automatically executed by a computer system without any third-party intervention when certain conditions are met. It’s like a vending machine: you put your money in, pick the product or service you want, and it gets delivered to you. The key difference here is that instead of using physical products, smart contracts are used to represent digital assets.
Instead of having to rely on banks and lawyers when making deals with other businesses, we’ll soon be able to use smart contracts to enforce trust and ensure everything goes according to plan during transactions.
Here is an example: if someone buys an item from you, the deal will be paid only when the item is delivered (or when it says in the contract). Smart contracts will release the payment and the deal will be closed since the conditions are met.
Another example is how Smart contracts can be used in the health sector; medical records that are stored on a blockchain can only be accessed with the patient’s private key. With smart contracts, you can be sure that your medical records are protected and can be accessed only by yourself and your medical providers.
Become part of social networks and communities
Blockchain technology can also be used to create social networks that are not controlled by a single authority. Instead, this type of platform would be governed by a group of people and organisations who want to participate in the network.
Blockchain is shifting supply chain management
Supply chain management is a term used to describe activities that happen between the sourcing of raw materials to delivering finished goods to consumers. In this process, there are many steps and different parties involved, including manufacturers, distributors and even retailers. This means there are numerous opportunities for fraud or error to occur as goods move through various hands along their journey.
The use of blockchain can help solve some of these problems by providing an immutable record of information such as origin, movement and quality – everything is transparent.
Blockchain can be used in supply chain management by tracking products from their original source all the way through production lines until they reach consumers. Each step along the way would be recorded on a blockchain platform so that anyone involved can see where their products have been or where they’re going next.
Using this technology enables companies from across multiple industries (such as manufacturing) work together seamlessly without having any prior experience with each other’s processes.
There is no sector that blockchain technology can't transform for the better
Blockchain technology is a transparent and secured way of sharing data and making transactions, agreements, and deals. The decentralised nature of blockchain makes it possible for everyone to have access to an identical copy of the ledger, which can be updated in real time with no single entity having control over it.
From healthcare to entertainment, finance and real estate, blockchain is being put into practice by some forward-thinking companies that want nothing more than better customer experiences for their users.
Conclusion
As you can see, the possibilities are endless. The next big question is how we can make sure that blockchain changes our societies for good. No doubt we need more educational content around the technology to ensure that corporations and individuals have enough information to make decisions about blockchain adoption.
Olga Bubnova, Founder & CEO at B.gain
Expert in Brand Management, Marketing and Communications for Tech.
I write about tech in simple terms.