Through the network, it is possible to carry out various transactions and store information about them. The technology is used in multiple industries – media, entertainment, banking, financial transactions as well as in the healthcare and IT sectors.
Its potential is huge, which is why I want to help you understand how Blockchain can revolutionize the IT world.
Shall we get started?
- Why Blockchain technology might be interesting?
- What is Blockchain? And how does it work?
- Blockchain vs. Bitcoin
- What kind of problems Blockchain technology can solve?
- 1. Information storage
- 2. Copyright protection
- 3. Data protection
- 4. Identity protection
- Why you should learn Blockchain as a developer?
- Blockchain examples of use
- 1. Supply chain management
- 2. Healthcare industry
- 3. Media industry
- 4. Government
- 5. Internet of Things
- 6. NFT
- Will Blockchain change the world? Conclusions
Why Blockchain technology might be interesting?
Blockchain technology is interesting for users because those using it can confirm transactions without the assistance of central settlement authority. Through this, all processes are transparent, and the consensus of users verifies the data stored on the chain.
However, these are not yet all the advantages of Blockchain.
Equally important, each interaction is recorded in Blockchain, providing the desired security requirements. Also noteworthy are Blockchain smart contracts, i.e. programmable contracts, verified by everyone in the network, thus forcing both parties involved in communication to adhere to it strictly.
I used to consider Blockchain equivalent to bitcoin and other cryptocurrencies. The subject seemed to me rather not very interesting or exciting.
But then I heard about NFT, and I started digging into the Blockchain subject more and more, finding out that this technology has many more different usages and areas of application.
Not only financial companies may benefit from using Blockchain systems. It seems like there are no limits on applications. Whenever security, transparency and traceability are vital requirements, the Blockchain seems to fit there too.
Today, Blockchain is no longer used only for buying and selling cryptocurrencies because, with the development of this technology, it can be used to store virtually any type of transaction. Interestingly, these take place outside the traditional system and, therefore, without the participation of public trust institutions.
What is Blockchain? And how does it work?
Blockchain solution stores and transmits information about transactions made on the Internet.
All shared data is arranged in the form of consecutive data blocks, and each block collects data on a certain number of transactions. When one of them is filled, another block of data is created, so a chain of blocks is formed.
Blockchain is a simple yet highly ingenious way to store and transfer information – wholly automated and considered secure.
How does Blockchain work?
All it takes is for one of the parties involved in a transaction to start the process by creating a block.
It is then immediately verified by multiple computers distributed across the network. If the block passes verification, it is added to a chain stored throughout the network, creating a unique record with a unique history.
Falsifying a single record from the chain would therefore mean changing the data in the entire system, which is highly unlikely. This is because Blockchain technology uses various algorithms to reach a consensus on a new state for the chain of blocks.
The main idea of using a consensus algorithm is to use a group of people involved in the system to make decisions instead of using a trusted third party, as we mentioned earlier.
This principle also applies to smart contracts.
A smart contract automates tasks by self-confirming the terms and conditions, triggering the following steps once the contract provisions are executed. Everything is done without the need for a central authority or legal system.
Why Blockchain is important in this context? Using this solution, it is possible to define more complex transactions defined by conditions written in the chain. As a result, this allows applications to be developed in more diverse areas than digital currency transfer alone, such as supply chain management, business process management or healthcare.
Blockchain vs. Bitcoin
I must admit that I used to associate Blockchain only with virtual objects. Just like Bitcoin with virtual currency.
I never thought of this technology in terms of its ability to solve problems in the real world.
In a way, Blockchain seemed to be detached from reality, capable of solving only a limited number of virtual issues, far from the needs of most companies and even further from the needs of people.
It turns out that the topic of cryptocurrencies is only a tiny part of the many problems that can be handled with Blockchain. Technology has much more in common with real-world problems than we can imagine.
I think that anyone interested in new technologies, including Blockchain, should be familiar with the associated terminology. Unfortunately, in the context of Blockchain and cryptocurrencies, key terms are often misused. For this reason, knowing the difference between Bitcoin and Blockchain is useful.
In simple terms, Blockchain is the technology that underpins the first cryptocurrency, Bitcoin, and was created just for this purpose. Therefore, Bitcoin network is the first example of how blockchain platforms work and its possibilities.
To avoid confusion in the naming and use of the terms Bitcoin and Blockchain, it is worth remembering one thing. When we say Bitcoin, we are referring to cryptocurrencies, while by Blockchain, we mean a type of accounting or system for recording transactions.
Relating this information to a real-world example, we can consider that Bitcoin is an alternative to familiar currencies like the Dollar or the Euro, and Blockchain is an alternative to centralized supervisory systems.
What kind of problems Blockchain technology can solve?
Why Blockchain is important?
In fact, many practical applications of Blockchain platform help understand its phenomenon. The possibilities for Blockchain applications seem to be endless. The system appears to be appropriate anywhere security, transparency, and traceability are crucial criteria.
- Do you want to buy virtual cats for your children?
- Do you want to enter into a relationship and have it certified?
- Want to buy a virtual asset to sell at a profit in the future?
- Or maybe you want to exchange virtual goods with people around the world?
- Or securely share your personal data?
- Or reduce costs and ensure excellent reliability and security in your company’s or country’s services?
No problem. Blockchain is at your disposal.
1. Information storage
Blockchain is a database that allows storing information including, but not limited to, data on exchanging goods or property.
In addition, it can serve as a way to confirm identities, collecting personalities, actual dates or diplomas, and certificates received.
It is also used in court records or banks, where it can be used as a cluster of loans taken out.
Additionally, it allows you to build a credible reputation online, which ultimately facilitates the exchange of goods, bypassing the central entity. Smart contracts, or self-executing contracts, can also be used for this purpose.
This is undoubtedly a simplification, eliminating unnecessary paperwork and reducing the time used for this task.
2. Copyright protection
The uncontrolled flow of digital data on the Internet often discourages creative individuals from producing value.
The implementation of Blockchain is a kind of encouragement in this case, which allows the creation and spread of data integrity monitored.
It also protects unauthorized individuals obtaining patents and legislative inequalities between countries.
Furthermore, blockchain technology makes it possible to prove ownership of the exclusivity associated with a product, thus solving the problem of copyright.
3. Data protection
Individuals and their possessions, medical history or purchasing preferences is a process that, in the face of ever-improving technologies, is becoming a highly complex task that requires expertise and professional solutions.
What’s more, in the case when the database containing digital data on both the company and all its customers is stored on a centralized server, which is owned only by the analyzed entity, even in a situation when appropriate backups are made, or the latest security measures are applied, the whole system is often defenceless in the face of a potential attack.
However, the situation is different concerning the Blockchain database, whose decentralized nature, relying on a synchronized record placed on all replicas owned by the participants in the system, avoids the risks associated with a single, central server.
4. Identity protection
Blockchain is characterized by security-enhancing, also anonymity.
This is because, with this technology, it is possible to represent individuals in such a way that it is virtually impossible to identify their real personas which positively affects secure transactions and generates many business benefits.
Why you should learn Blockchain as a developer?
Blockchain is one of the fastest-growing information technologies. All over the world, projects based on this technology are constantly growing. Statista shows that the worldwide blockchain market was valued at 1.57 billion U.S. dollars in 2018 and is forecast to rise more than a hundred times to 163 billion U.S. dollars by 2027.
While Blockchain technology is relatively new, it is also one of the most promising on the market. Its wide range of applications – from smart contracts, lending and banking system, ticket sales, and artwork to medicine and even marriage – makes Blockchain one of the most in-demand developer skills.
Blockchain examples of use
1. Supply chain management
Have you ever suffered from a delayed shipment? Did it cost you something?
Imagine a large logistics company and its large cargo that is late.
Of course, such a delay must cost money. In an environment where many parties collaborate and depend on each other, a minor disruption in communication or cooperation can ruin the entire supply chain.
But having visibility into the whole process can help overcome such scenarios.
These days, logistics processes are very complicated. They often lack transparency, and finding a weak link in the entire supply chain is challenging.
With the use of Blockchain, there is no question of data ambiguity, as all supply chain partners involved in transportation and logistics have access to the same version of the ledger, and each user has insight into the individual blocks of the supply chain. So it is easy to identify the location of goods or their origin.
Companies such as UPS, DHL, Maersk, ShipChain, PartChain, BMW and wine suppliers have already implemented Blockchain-based solutions to track shipments, optimize delivery routes, validate transactions or eliminate counterfeit alcohol sales.
Through constant insight into orders and routes, costs can be optimized, and smart contracts can be used to make payments. In turn, IoT and Blockchain provide access to real-time data – such solutions are used by ports in Antwerp, Rotterdam, and Singapore.
2. Healthcare industry
Do you like order and good data organization? Of course, we all like it. But, unfortunately, essential services often lack it.
This is a typical case in healthcare, resulting in inefficient data exchange between hospitals and medical facilities or even no exchange at all.
Blockchain helps share such sensitive data while ensuring its confidentiality and immutability.
Look at MedicalChain, which helps maintain the integrity of medical records. Doctors, hospitals and laboratories can request patient information, but the patient’s identity remains secure and protected from outside sources.
Blockchain in healthcare also means the ability to share data securely with individual specialists and research centers – which can contribute to the development of medicine.
Importantly, all bases in Blockchain are distributed, so they are much better protected against leakage of sensitive data. They are also scalable – even in hospitals, they guarantee easy recording and retention of key data.
The technology also enhances the security of drug distribution and helps verify the credentials of medical personnel (certificates and diplomas shared on the Blockchain network cannot be falsified).
3. Media industry
Becoming a recognizable artist (or author/content creator/publisher) these days seems to be not so difficult anymore.
Social media and the ubiquitous Internet make it easy to reach an audience, even if the supply of such content is enormous. But being a recognizable, independent, and well-paid artist is much more difficult.
That’s why many artists cooperate with companies that help them make money from their artistic work. On the other hand, these entities impose requirements to make their work more compatible with a broader audience and sell more.
In this way, real art loses value and is treated as a low-quality, fast-consuming resource. Blockchain helps digitizes intellectual content for secure storage, manage it securely and protect it from piracy. And finally, they help monetize their true value.
The rapid growth of Blockchain in the media and entertainment sector was particularly noticeable during the coronavirus pandemic.
Social isolation closed cinemas, theatres and concert halls, hindered the development of this sector and cut off creators from their source of income. As a result, many have used new technologies to sell tickets, works, or collectable gadgets. Besides, Blockchain supports creators in enforcing copyrights and royalties.
Do you like how your country’s institutions and services work? Do you consider there is space for improvements? I bet so.
This is because the government institutions and their procedures are slow, expensive and require much bureaucratic work. And are prone to corruption.
Why is Blockchain important to the government institutions?
Systems based on blockchain could help here a lot. Starting from providing resistance to corruption by decentralization and transparency, as well as cutting down costs by reducing bureaucracy. At the same time, it introduces the highest level of security and thus makes the country trustworthy in how personal data is managed and kept.
The key idea behind Blockchain technology is that a decentralized ledger of transactions can be used to record, confirm and transfer all kinds of value.
The technology can also be used to provide secure transactions or exchanges involving the government.
It includes voting, creating digital records of residents and land, vehicles, marriage and death certificates. Governments may also use Blockchain to confirm digital identity by securely encrypting ID cards, passports, driver’s licenses or voter registration.
The leader in this area is Estonia, where public services are already almost entirely digitized – i-Voting, e-Tax Board, e-Business, e-Banking, e-Ticket, e-School, the e-Governance Academy.
5. Internet of Things
Devices, machines and software connected to the Internet can “talk” differently.
They exchange data, and thanks to that, we can find out current weather conditions outside our homes, get deep-in analysis of our morning jogging, track vehicle fleet in our transportation company, monitor important agricultural factors on our farm and many more.
This variety of things makes communication difficult. Blockchain has a chance to become a standard in how information is exchanged in IoT. In addition, providing excellent traceability and authorization when needed.
The IoT, along with the growth of interest in technology, has begun to face the problem of scalability and security. Combined with Blockchain, however, it can do a lot. Embedding IoT devices on the foundation of Blockchain technology lowers the risk of hacking attacks, reducing the number of potential break-in points.
By abolishing a central repository in the Internet of Things networks, Blockchain will enable these networks to self-protect. IoT devices in a common group could automatically stop working or notify the user if they receive a request to perform tasks that would be anomalous or seem suspicious for being outside the scope of their typical use.
In the case of the Internet of Things, in which various devices function by constantly processing information on an ongoing basis, Blockchain will work very well.
For example, airports process information regarding weather, air traffic, security, time, and passenger control thanks to Blockchain’s significant support. As do smart buildings or even entire smart cities, where information technology manages energy, water consumption, temperature, household appliances, television, alarms, and cameras, which, connected to the Internet, generate vast amounts of data.
These devices work together through data processing, and the technology discussed here can make this cooperation reliable.
Another example of Blockchain usage is NTF or non-fungible token.
Deciphering the abbreviation suggests that we are dealing with a unique, collectible, one-of-a-kind asset. Not surprisingly, this has attracted the interest of investors who are ready to spend millions of dollars on NFT.
NFTs, as digital assets representing graphic art, music, movies, game objects, virtual avatars or video game skins, have been around since 2014 or so. But they are currently experiencing a renaissance as they become an increasingly popular way to buy and sell digital artwork.
Essentially, NFTs are like physical collector’s items. Only they’re digital.
How much does an NFT cost? It depends, of course. Some reach astronomical prices and owe this primarily to their collectible value. The consensus of collectible non-exchangeable tokens is built by the market, the brand and their rarity.
If you feel tired of mundane matters and problem-solving, try to build an eccentric solution for the investments. For example, the NFT might be considered as a solution for investments into unique virtual goods, providing certificates of their possession that can be safely shared with the public.
There are more crazy, weird, sophisticated solutions based on Blockchain. However, they are usually dedicated to very narrow audience with uncommon problems. In this example, I just wanted to show you why Blockchain is important and how it is taking over the digital world.
Will Blockchain change the world? Conclusions
All indications are that Blockchain has the potential to revolutionize almost every area of life, economy, industry and technology. Systems that use Blockchain to transfer and collect data offer numerous benefits and even more application possibilities. Furthermore, institutions and companies that use Blockchain technology streamline their operating processes, guarantee a high level of security for customers, and save time and money in many cases. Therefore, I think that every enthusiast of new technologies and software development should keep their finger on the pulse and closely watch the sector’s growth.