Over the last few years, blockchain has steadily emerged as a buzzword and has played an instrumental role in making cryptocurrencies mainstream. The constant rise and fall of the various digital currencies have grabbed everyone’s attention, owing to blockchain technology. From Wall Street bankers to governments and laymen, everyone considers crypto as the future of the fintech world.
Industries are looking forward to adopting blockchain technology. It is estimated that by 2022, global spending on blockchain solutions will reach $11.7 billion. Furthermore, various studies have revealed that implementing blockchain will help multiple sectors to save costs, improve efficiency and boost overall performance.
Blockchain is the underlying technology that enables these various cryptocurrencies to succeed. However, its benefits go way beyond this. Its ability to create an uninterrupted database has opened doors for a plethora of applications.
The technology can certainly bring about massive changes in various industries, including finance, voting, transport, healthcare, and more. The rise of blockchain will eventually bring about a revolution and change the world as we see it.
Here is an article that will take you through the definition of blockchain, its applications, and what the future holds for it.
1. What is blockchain?
Blockchain is an extensive database that stores information in the form of blocks and chains them together. The data is collected and stored in chronological order, which cannot be tampered with or deleted. However, the permitted users can verify the data to gain clarity on the stored information.
The uses and applications of blockchain are many, but it has primarily been used as a digital ledger. These are the three main components that come together to make blockchain a success:
1. Ledger technology:
The technology primarily acts as an open ledger for everyone, which cannot be changed or edited. It is entirely transparent. Any information that is added to the system gets collected alongside the existing data stored. Thus, all the network participants have access to an enormous record of immutable transaction data on the platform.
2. Immutable records:
As mentioned earlier, records stored inside a blockchain technology cannot be changed, edited or deleted, thus making them immutable. These records are untouchable. If any error gets crept in, then an opposing transaction can be used to correct it.
3. Smart contracts:
One of blockchain’s most significant advantages is that it comes attached to a set of Smart Contracts rules. These contracts can execute functions automatically. In addition, the contracts determine conditions upon which the transactions are to be performed.
These transactions are encrypted, do not require the presence of a third party, and are entirely digital. Hence, there are no processing fees or time delays involved, unlike manual contracts. For example, a smart contract can transfer the ownership of a residential building to a new owner as soon as the previous owner is paid.
2. How has blockchain disrupted modern businesses?
Blockchain technology is still very much in its nascent stage, yet it has had a significant impact on finance. While cryptocurrencies have been responsible for bringing the technology to the forefront, the advantages of blockchain have been recognized by various industries. As a result, most modern businesses are now undergoing a sea of change as they prepare themselves to usher in this new era.
These are some of the few advantages that blockchain technology provides over traditional business methods:
1. Decentralized transactions:
Blockchain is primarily an open ledger that can record transactions transparently. Thus, cross-border transactions will receive a much-needed boost upon their broader acceptance. In addition, it would help track down transactions easier than before. It could also help establish a cashless society.
With increasing decentralized transactions, businesses will reach out to clients across the globe and accept payments digitally. Blockchain provides a massive boost to secure, trustworthy and traceable transactions, which would generate immense revenue for the global economy.
The Central Banks of various nations, which operate based on the public’s trust, would not be required anymore. Instead, blockchain’s transparent and traceable solutions could provide a much clearer picture of the state of the economy.
2. Universal forms of currency:
The advent of blockchain has been a boon, and cryptocurrencies across the globe are reaping its benefits. The new forms of currency, such as Bitcoin, Ethereum, and Dogecoin, have been created upon the bedrock of blockchain technology.
There are more than 10,000 cryptocurrencies, and 50 million blockchain wallet users exist worldwide. However, they do not enjoy as much credibility as the American Dollar or the Euro. Regardless, they certainly have been impactful enough to garner the attention of both the private and the public sector entities.
The rise of universal forms of currency will give a significant boost to globalization and benefit various industries. Eventually, businesses will be able to perform seamless transactions all over the globe without worrying about exchange rates.
3. How blockchain will transform various industries
While blockchain technology is considered relatively simple and easy, it can profoundly change the way modern businesses and industries function. Let’s have a look at the sectors where blockchain is playing a key and disruptive role.
Bitcoin is the best-known example of blockchain technology and has had far-reaching effects on finance. Companies that offer financial services and manage funds have already established their cryptocurrency units. Moreover, stock exchanges such as NASDAQ are also joining in on the blockchain bandwagon.
Credit Suisse, a global leader in banking services and financial solutions, has partnered with Paxos to settle its stocks in the USA. An eminent blockchain company, Ripple, has partnered with banking giants such as Santander and Western Union to facilitate cross-border payments.
JPMorgan Chase has developed its blockchain-based currency called JPMCoin. This currency would help the organization to perform transactions with other institutions. In a nutshell, blockchain has the potential to bring a paradigm shift in the financial sector.
The voting industry has been stagnant and devoid of significant changes over the last couple of centuries. The modern electronic voting machines can only offer minute improvements. The integration of blockchain into the voting system can potentially reinvent it. It provides unparalleled security measures and eliminates outdated methods of voting such as paper ballots.
Follow My Vote has come up with a unique solution. It allows users to vote from their smartphones, tablets, or computers with complete security. This innovation is the application of Blockchain’s ability to store immutable records. The company is also collaborating with BitShares, a leader in the blockchain development industry, to develop the new voting platform.
3. Supply chain
Blockchain promises newer solutions and intriguing opportunities for the world of supply chains. For example, blockchain technologies allow organizations to store information such as price, location, date, quality, and more.
The technology makes management of such data very easy, offering users to monitor the progress within the supply chain. A seamless, transparent, and easily traceable supply chain will allow industries to function with the highest levels of efficiency.
The supply chain managers will be in a position to track the location of the products anytime. They can also resolve the discrepancies and supply chain delays ahead of the curve. Blockchain makes all this achievable while significantly bringing down administrative costs as well.
4. Human resources
Blockchain will help HR professionals to have easy access to verifiable data, and employment processes can receive a much-needed boost. It helps save time, improve overall efficiency and make hiring new talent a breeze.
The technology can also help HR managers to store employee data securely by implementing encryption. Smart contracts could also play a significant role in this industry. It can ensure payment to contract-based workers only after they have finished the assignment. Furthermore, HR can automate payrolls instead of waiting for the banks to process their salaries.
Chrono.tech is one of the blockchain projects developed to transform people’s approach towards jobs and contract-based roles. It uses smart contracts and untampered data to make accessing employment opportunities easier for both employees and employers.
Healthcare is another critical sector that would benefit enormously by adopting blockchain technology and making it mainstream. Traditionally, healthcare systems have always struggled to collect previous medical information of their patients. Furthermore, manual data entry can be error-prone, vulnerable to hacking, and challenging to track.
Integration of blockchain-based solutions into the industry will eventually transform record-keeping. Thus, paving the way for medical institutions to have better clarity on the patient’s medical history. Health insurance companies could also benefit from blockchain technologies. Clients often tend to hide past medical history from their records to take advantage of a specific policy.
HealthVerity is a player within the medical sector, which is developing permission and access rights-based technology. The HealthVerity platform will work on the blockchain network with the support of private and government entities. The technology ensures that only authorized professionals can handle the client’s medical data. Thus, the implementation of blockchain promises greater security and privacy.
4. What lies next for blockchain technology?
Blockchain has made a significant impact on the world of finance with cryptocurrency, making everyone take notice. Cryptocurrencies have the power to challenge traditional currencies and have already shocked the established players in finance. Thus, it can be an early sign of how blockchain can significantly impact the rest of the industries.
The most significant advantage offered by blockchain is that no one can own it, promises unparalleled security, and is completely decentralized. This makes it a big hit with business houses and individuals who want to operate with greater privacy. In addition, various companies have recognized the potential of blockchain, and they are eagerly racing to implement it into their systems. As a result, the future for this relatively new but innovative piece of technology seems bright.
Are you planning to explore the benefits of blockchain technology yet?