The last time this world changed a lot was with the invention of the internet! Can you imagine ever living without the ever-present Google or all the other social media sites like Facebook, YouTube, etc? It sounds impossible. Well, this time the world might change again because of the invention of Blockchain! Blockchain is becoming more and more popular within the last decade and it might be an understatement to say that it is the next big thing in the world of tech. Blockchain has so many applications in every sector you can imagine such as healthcare, finance, government, identity, etc. And that’s not including its most popular application which is Bitcoin.
However, Blockchain is much more than just Bitcoin. Its decentralized nature makes it extremely secure and susceptible to attacks which is why it is gaining popularity in many applications around the world. So let’s understand the essential nature of Blockchain and its varied uses around the world.
What is Blockchain?
Blockchain is created as a chain of blocks where each of these blocks has some digital information. Each of the Blockchain blocks has a unique 32-bit whole number called a nonce which is connected to a 256-bit hash number attached to it. These blocks are connected to each other using a chain of a cryptographic hash function which links each block to its previous block. These three components together ensure security in the blockchain.
Blockchain is distributed which means everyone obtains a copy in the case of a public blockchain. So it is very difficult to modify the data in the blockchain because to do so every copy in every location would need to be changed (which is near to impossible) This makes blockchain both distributed and immutable along with maintaining transparency as the data in the block is not hidden in any way. All of these properties of blockchain ensure the highest levels of security which is why it is so popular in many applications that prioritize security and transparency.
So let’s see some applications of Blockchain in the real world.
Applications of Blockchain
1. Asset Management
Blockchain plays a big part in the financial world and it is no different in asset management. In general terms, asset management involves the handling and exchange of different assets that an individual may own such as fixed income, real estate, equity, mutual funds, commodities, and other alternative investments. Normal trading processes in asset management can be very expensive, especially if the trading involves multiple countries and cross border payments. In such situations, Blockchain can be a big help as it removes the needs for any intermediaries such as the broker, custodians, brokers, settlement managers, etc. Instead, the blockchain ledge provides a simple and transparent process that removes the chances of error.
2. Cross-Border Payments
Have you ever tried to make cross-border payments in different currencies from one country to another? This can be a long complicated process and it can take many days for the money to arrive at its destination. Blockchain has helped in simplifying these cross border payments by providing end-to-end remittance services without any intermediaries. There are many remittance companies that offer Blockchain services which can be used to make international remittances within 24 hours.
Blockchain can have a big impact on healthcare using smart contracts. These smart contacts mean that a contract is made between 2 parties without needing any intermediary. All the parties involved in the contract know the contract details and the contract is implemented automatically when the contract conditions are met. This can be very useful in healthcare wearing personal health records can be encoded via Blockchain so they are only accessible to primary healthcare providers with a key. They also help in upholding the HIPAA Privacy Rule which ensures that patient information is confidential and not accessible to everyone.
Perhaps one of the most popular applications of Blockchain is in Cryptocurrency. Who hasn’t heard about bitcoin and it’s insane popularity. One of the many advantages of cryptocurrency using blockchain as it has no geographical limitations. So crypto coins can be used for transactions all over the world. The only important thing to keep in mind is exchange rates and that people may lose some money in this process. However, this option is much better than regional payment apps such as Paytm in India that are only relevant in a particular country or geographical region and cannot be used to pay money to people in other countries.
5. Birth and Death Certificates
There are many people in the world who don’t have a legitimate birth certificate especially in the poorer countries of the world. According to UNICEF, one-third of all the children under the age of five don’t have a birth certificate. And the problem is similar to death certificates as well. However, Blockchain can help in solving this problem by creating a secure repository of birth and death certificates that are verified and can only be accessed by the authorized people.
6. Online Identity Verification
It is not possible to complete any financial transactions online without online verification and identification. And this is true for all the possible service providers any user might have in the financial and banking industry. However, blockchain can centralize the online identity verification process so that users only need to verify their identity once using blockchain and then they can share this identity with whichever service provider they want. Users also have the option to choose their identity verification methods such as user authentication, facial recognition, etc.
7. Internet of Things
Internet of things is a network of interconnected devices that can interact with others and collect data that can be used for gaining useful insights. Any system of “things” becomes IoT once it is connected. The most common example of IoT is perhaps the Smart Home where all the home appliances such as lights, thermostat, air conditioner, smoke alarm, etc. can be connected together on a single platform. But where does Blockchain come into this? Well, Blockchain is needed for providing security for this massively distributed system. In IoT, the security of the system is only as good as the least secured device which is the weak link. Here Blockchain can ensure that the data obtained by the IoT devices are secure and only visible to trusted parties.
8. Copyright and Royalties
Copyright and royalties are a big issue in creative sectors like music, films, etc. These are artistic mediums and it doesn’t sound like they have any link with Blockchain. But this technology is quite important in ensuring security and transparency in the creative industries. There are many instances where music, films, art, etc. is plagiarized and due credit is not given to the original artists. This can be rectified using Blockchain which has a detailed ledger of artist rights. Blockchain is also transparent and can provide a secure record of artist royalties and deals with big production companies. The payment of royalties can also be managed using digital currencies like Bitcoin.
Blockchain is a relatively new technology that is still not widespread in all industries but it is slowly gaining more momentum. Once Blockchain becomes more widespread, it could become a powerful tool for the democratization of data that will encourage transparency and ethical business tactics. And the applications of Blockchain in the world are only increasing with the result of faster transactions, more transparency, and security as well as reduced costs. Who knows, Blockchain may change the world in the future!