The Blockchain Revolution: How Blockchain Technology May Reshape Global Industries
Traditionally, people must rely on databases to store and transfer information. These databases are housed on servers that are owned by private companies and the data within the company holds the responsibility of keeping it secure. Therefore, the likes of cyber crime, server failure, and human error threaten to compromise your private data. The advent of blockchain technology is a promising alternative means of storing information on a decentralized network — a method that does not require people to trust an individual organization with their private data. The cryptocurrency market is one example of how blockchain is currently being used to benefit society, but there are numerous other impressive applications this new technology may have in the future.
Blockchain is the Internet of Value
Industry leaders have coined the phrase “internet of value” as a means of describing blockchain technology to the laymen. While the regular internet allows people to publish information that is accessible all over the world, blockchains can be used to send “value” anywhere in the world. The value being sent is stored within a block of data. Although this data exists within a blockchain that is used by every peer within the network, the valuable data within each block cannot be accessed without the correct access key.
Blockchains can store all types of data, but depending on the purpose of the blockchain, the process for gaining the access key can vary. For instance, Bitcoin requires that a complex cryptographic puzzle be solved in order to confirm other transactions that are occurring within the Bitcoin network. Once the puzzle is solved, the user responsible for solving it is given a key that allows them access to a file within the blockchain that represents a specific amount of Bitcoin.
What are Smart Contracts?
Smart contracts are a core application of blockchain systems and they function by automatically producing the valuable blocks of data once certain conditions are met. The basic steps of a smart contract looks like this:
- The contract (computer code) is written and executed on the computers within the network.
- All computers must be in agreement that the code was executed correctly throughout the network.
- If the code was executed correctly, the contract automatically fulfills the task designated within the contract.
The Benefits of Blockchain Technology
A major advantage offered by blockchain technology is that it can eliminate the need for a middle-man when processing transactions. As an example, when sending money digitally to someone abroad, it is normally necessary to contact a bank or other financial services institution and process the transaction through them. With a blockchain network, a group of peers can perform the same essential tasks as a middle-man company — like keeping a consistent record of all transactions, establishing an identity for each of its users, and establishing/fulfilling contracts based on the user’s requests. A smart contract can be assigned to each task, ensuring the integrity of the process.
Blockchain Technology in Logistics Industry
Supply chain and logistics operations are complex and often require immense amounts of data manipulation to run efficiently. Every time you order a product, the merchant has to confirm the validity of your payment, track down the item, and ensure that it safely arrives at your location. This process could be significantly improved using a blockchain-based system that automatically validates each step of this process, effectively eliminating the margin-of-error.
Blockchain Technology in Government Institutions
Political power is highly valuable, therefore many people are willing to use illegal methods to rig voting systems. With a blockchain-based voting system, citizens may be offered a chance to vote in a way that is immune to the threat of corruption.
Blockchain Technology in the Energy Industry
Energy companies are currently backing the idea that blockchains can be used to track electricity as it flows through the power grid. This may allow individuals who have their own solar power systems an opportunity to sell their excess electricity to their peers, rather than selling it back to the main power grid. The blockchain would be able to streamline energy-related transactions between consumers, large and small-scale energy producers, and utility companies. This would also be far more efficient, lowering energy costs and cutting the impact energy production has on the environment.
Blockchain Technology in the Healthcare Industry
Blockchain is also slated to improve patient privacy in the healthcare industry. In its current state, the healthcare industry puts a large amount of sensitive patient data at risk by housing it in centralized databases. Forward thinking healthcare executives believe that blockchain technology will be a revolutionary tool for gaining more control over who can gain access patient data and how. When placed into properly built blockchain, this data will be more secure than ever before.
Blockchain is revolutionary. Still, it is important to remember that blockchain technology is at an immature stage. As it progresses, organizations within every industry will have new opportunities to boost their efficiency. This won’t only impact large organizations, but private citizens as well. By staying informed about the latest trends in the blockchain ecosystem, you can better evaluate how this technology can be used to improve your own business or career.