Applications of Blockchain Technology
Unsatisfied with the trust-based remote transactions utilized by financial institutions, a mysterious programmer known as Satoshi Nakamoto, developed a solution in the form of Bitcoin, a cryptocurrency that’s made secure by a decentralized ledger of financial transactions. This distributed digital ledger is known as the blockchain due to the way it securely connects blocks of information together.
Bitcoin’s meteoric rise has opened the doors of the international market to virtual currencies, greatly disrupting the field of banking and finance. But the technology behind Bitcoin, displays potential that transcends the boundaries of cryptocurrency.
As businesses continuously learn how to better use blockchain technology, it has come to light that a distributed digital ledger can be programmed to record a lot more than financial transactions.
MVP Asia Pacific CEO, Darren McVean believes that, “the current and future applications resulting from the exciting blockchain technology, promises to unlock massive efficiencies in many industries such as: finance, medical, supply chain, and almost any industry that can benefit from fraud resistant, low cost and high speed transactions.”
Here are seven applications of Blockchain that will change society in ways we’ve only dreamed of:
1) Decentralized Record Keeping
From personal information to professional data and proofs of ownership, modern society requires a great deal of documentation. The amount of resources that record-keeping consumes, increases in parallel with a nation’s population. This results in sluggish public services and a high rate of errors in important documents.
While technological advances in new media has allowed public organizations to record and publish data more efficiently, keeping all of modern society’s information in centralized locations attracts unwanted risks from hackers, corrupt officials, and even natural disasters.
Storing the information in blockchains eliminates the risk of tampering thanks to the technology’s use of public key cryptography. The blockchain also ensures the preservation of data by distributing it to thousands of computers all over the world, that work in concert to maintain the integrity of the information.
2) Transparent and Accountable Governance
Even the greatest empires of old are nothing more than history now. Political structures change and improve with the times, willingly or otherwise.
The fall of the imperial political structure was instigated by the need to re-distribute power back to the nations; blockchains will have a similar influence to democracies, giving power back to the people by instilling transparency and accountability in governance.
Elections can be greatly improved by using the blockchain as the medium for casting votes. Not only is the digital ledger tamper-proof, it is also transparent. With the results indisputable and immediately available, elections will become brief and decisive undertakings.
Public service is usually hindered by corruption or incompetence; two problems that can easily be remedied by making offending officials accountable for their actions. By documenting the government’s decision-making process in the blockchain, the citizens and the ombudsman that represents them can take appropriate and timely action against corrupt or incompetent public servants.
3) Supply Chain Auditing
Globalization has had a profound effect on the international market, making it easier than ever to purchase specialized goods. Unfortunately, the lack of strict monitoring and regulations has allowed scammers to thrive in niche markets, where they can commit fraud with impunity.
Blood diamonds are wiped clean of their terrible origins; stolen goods are laundered into the market; and fake merchandise are passed for the real deal in niche markets. The consumers are left helpless, with the regulating bodies tied-up with the larger markets.
The great thing about decentralized systems like the blockchain is the fact that they don’t need administrators or a governing board; the blockchain system takes care of itself, which makes it a perfect match for niche markets that slip through the protection of the regulatory agencies.
Information about various goods can be recorded in the blockchain, whether it may be the product’s origin, its quality, the materials used in its creation, and the standards and ethics of the company that made it.
Integrating blockchain technology to the supply chain auditing system, grants consumers the power to support the companies that make great products and boycott the shady businesses that only aim to make a quick buck.
4) Secure Data-Sharing
The advancement of civilization has always been driven by the trade of goods and information. The rise of the internet has taken information trade to an entirely different level. Unfortunately, a lot of institutions still maintain the exclusiveness of their most important databases.
There is no doubt that there are types of data that necessitate secrecy, and a self-administering system that can block access to confidential information but allow unrestricted access to everything else, can catalyze international progress like never before.
Blockchain technology is vital in terms of implementing such advanced databases. Freedom and security have always been inversely proportional but the introduction of cryptographically locked segments of data amidst freely accessible information, changes everything.
For example, healthcare institutions can use blockchains to share data across platforms, without compromising the personal data of their patients. This breakthrough will result in more accurate diagnoses, increasingly effective treatments, and more cost-effective healthcare.
5) Cheap and Instantaneous Stock Transactions
Stock transactions usually take three days to settle and while this delay doesn’t seem to hinder the stock market, there is no doubt that there are benefits to instantaneous transactions.Bitcoin transactions for example only take 10 minutes to clear, which is the interval between the addition of new blocks to the blockchain. Other cryptocurrencies have opted for shorter intervals, increasing the speed of transactions even further.
Efficiency isn’t the only improvement that blockchain powered virtual currencies have over wire transfers and money grams. According to the banking titan, Santander, integrating Blockchain technology to the stock market industry will result in investor savings in the range of $20 billion a year, thanks to the miniscule ‘gas’ fees that cryptocurrencies charge.
6. Blockchain Crowdfunding (Cryptoequity)
Crowdfunding has breathed new life into business and industry by letting new players step onto the field. Startups that should have been trampled under the feet of corporate giants have stood their ground and flourished, brandishing the flag of the free market.
Consumers who were once passive targets of marketing schemes and psychological manipulation, now have the power to give form to what they desire.
Crowdfunding is a step in the right direction but it is still a relatively new concept, leaving a lot of room for improvement. The limitation of this alternative form of finance is the fact that it is merely a means to an end.
Consumers fund projects that they support but aside from a few arbitrary rewards, the only return on investment (ROI) that they receive is the product/service itself. It is in this aspect in which blockchain crowdfunding shines.
Blockchain crowdfunding integrates cryptocurrencies and corporate structure into the fundraising system. Instead of pledging money in exchange for future rewards, consumers purchase a company’s cryptocurrency tokens. These tokens are known as cryptoequity because they act like shares in publicly traded companies.
This system transforms crowdfunding into a legitimate investment option thanks to the potential of cryptocurrencies to surge in value. And because the cryptoequity of investors is recorded in the blockchain, the security in this type of investment is also unparalleled.
7. Smart Contracts
Blockchain’s strong suit is its autonomy and peerless security, which makes it the ideal medium for self-executing contracts.
To ensure that both parties adhere to the terms of a contract, agreements can be converted into lines of code that are then stored on the blockchain and are executed at the designated date.
These smart contracts make way for secure, transparent, and irreversible transactions that can be carried out by anonymous parties without the need for the intervention of a third-party or central authority.
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