The thing is that while experts in the financial markets are calling Bitcoin a bubble, the big corporates are going behind the technology – Blockchain. But, why so? What is so great about the Bitcoin technology and what are the various applications of it that you do not know about.
What is Blockchain?
Blockchain is basically a database. A database that is online and that is decentralized. So, there is no one authority controlling the whole network. In fact, anyone with an internet connection can access the network. In the traditional framework, information is stored away in big servers in some geographical location. It is a huge infrastructure, and the servers are owned by big companies and financial institutions.
When it comes to blockchain, there is no need for any such hefty facilities. The information is saved across the network, no servers or huge infrastructure is required. Since the network is being supervised by everyone on the network, faking any transaction on the network is nearly impossible.
How can this work?
Oh, it works and it works beautifully. The network is of a series of personal computers. Blockchains store their information in this network. All the information in the blockchain is stored in what are called blocks. Each of these blocks has a time stamped on them.
Additionally, each of these blocks are connected to the previous block, forming a virtual chain. Hence, the name. So, as you may have already figured, it is like a Google Drive, but there is one critical difference. No one can change the information that is already there, it can only be updated and can be recorded as new information. All of these chains are made possible by cryptography. Cryptography means encoding. So, each time a record is updated, it generates a unique code.
Blockchain has been around for a while now, but it was made a household name by Bitcoin. But, it is not the only one. Let’s find out what other interesting uses of blockchain technology are there. They might surprise you.
Interesting Applications of Blockchain
There are many applications of Blockchain, but here are the ones that may have the most far-reaching impact on the society.
Transform Online Data Storage
What happens when you store your data online now? There are servers that are placed in certain geographical locations that save it. There are two issues with a solution.
- First of all, the one company that is providing you the cloud storage has all the data.
- Second of all, the servers that are limited to one location can become a target for hackers. You might lose sensitive data, which cannot be retrieved, maybe ever.
The point is that you have to say a prayer before putting your data up on these cloud storage devices.
With Blockchain, these kind of fears are going to disappear. With your data saved across multiple computers, there is no way a hacker can attack. They have no one place to attack. Moreover, it is a decentralized database, so a single company does not own it.
Also, the data is encrypted, which is an additional layer of security. In the future, people will be able to offer the space they have to spare on their personal computers. Companies like Sia and storj.io are already exploring this space and will offer us full-fledged solutions to secure our online data, blockchain style!
Revolutionize Global Money Transfers
This was the first use of the blockchain technology that the first movers found because it was the most obvious. If you had a technology that could transfer data in a completely secure manner and without leaving a trace, finance is the first industry that you would try to implement it in. Bitcoin, Ethereum, XRP by Ripple, Monero, and so many other cryptocurrencies stand proof to that fact. There have been a lot of ethical concerns that have been raised in this regard as well.
The anonymous and decentralized transactions with low fee are a great way to take financial inclusion forward. However, these very transactions also offer an ideal solution for criminal to trade across the world.
Though every technology has its own pros and cons, this is one serious coin that has to be addressed if the blockchain technology has to move forward. This is the reason that there is a lot of discussion around developing a regulatory body. This entity can then lay down rules for how transactions can take place in the world of blockchain.
Protecting User Identity
User identities are compromised online frequently. This is a huge setback to the idea that the human society should go 100% digital in the not-so-distant future. There is identity theft, financial frauds, and what not because of the present technology being used for security purposes.
Online users have repeatedly lost their personal information to hackers and identity thieves who are trying to make a quick buck at the expense of people. Blockchain technology has an answer to the problem.
Blockchain technology allows the identification of a user in a unique, non-changeable, and highly secure way. They can also save this information on equally secure databases that are not as easy to hack. The digital signatures created by the blochchain technology are based on a cryptographically generated public key.
There needs to be only one check and that is that if a transaction is being signed off, it should be signed by the right public key. The assumption is that the individual who has access to that key is the owner of the asset being transacted. There is no need to reveal the identity of the user or attach any kind of markers to that transaction. Also, since each transaction is executed independently, no kind of pattern analysis can happen either.
This way, the user can conduct a multitude of transactions without ever revealing who they are.
The Era of Smart Contracts
If you have ever heard of a platform called Ethereum, then there is a slim chance that you have not heard of smart contracts.
Because it is the smart contracts that make this platform unique and add to its utility in the future.
How would you feel if the next time you go to rent a house or buy one, the third party fee is shaved to half or even eliminated. Great, isn’t it? That is what smart contracts can achieve. These are legally enforceable digital contracts.
This is what developers do. Once you draw up a smart contract, all the conditions, including the payout, the time frame, the details of both the parties, etc. are encoded in the contract. Once all the conditions of the contract are met, the funds will be released to the appropriate account.
Taking Over Notary Services
What does a notary do? It validates the statement of a user at one particular time. If you have been reading carefully, then you know that timestamping is an innate feature of blockchains. There is a whole network that can validate that a particular data entry was made at one single time.
Any further changes in the data are also highlighted. So, it can be proved in a court that something exists at a given time. A startup from Argentina has been working on blockchain-powered notary services. Blockchains can offer the most efficient notary services ever.
The notary services of today are highly centralized. Blockchain can not only help them become more efficient, but more secure as well.
Transforming the Democratic Process
What can more far-reaching application a technology have than changing the future? Elections are an innate part of a democratic process.
They are the ones that choose the leaders of the free world. However, due to a variety of reasons, they are not always as transparent as the citizens would want them to be. But, with a technology like blockchain, it is possible to completely transform the process.
The data stored in the blockchain is almost impossible to hack into. This means that no one can tamper with the votes once they have been cast. The data is completely secure and the election process can be conducted, by the book. In this manner, the winner that comes out will truly be the leader people chose. That is a big win.
Blockchain technology is new. There is an initial euphoria about how it can solve all the problems in the world. But, it is a powerful technology that has answers to a lot of questions in the world, if not all.
These applications of blockchain can only become a reality if there are enough smart developers working on the various blockchain platforms and if there is enough funding to drive them all.
All of that is in the future. But, from where the world is standing today the future is looking quite bright.