Blockchain Applications That Are Transforming Society
Blockchain technology was first implemented in the form of bitcoin in 2009. Since then, it has gained worldwide attention and seen unprecedented growth and adoption rate. The concept of a trustworthy record allows the blockchain technology to have immensely useful implications.
As of this moment in time, blockchain technology has a wide range of applications and use cases. It is a revolutionary technology, capable ofcompletely altering the face of digital relationships and how they work.
Many of the blockchain applications have already started to transform society. But before delving into that, let’s first ingest a brief introduction to the blockchain technology.
A Brief Introduction to Blockchain Technology
Blockchain technology gets its name from the individual entities making up the technology i.e. a block. It is a growing list of records that are linked to one another using cryptography. Any block in the blockchain technology contains:
- A cryptographic hash of the previous block
- A timestamp
- Transaction data
Unlike other blocks in a blockchain, the very first block doesn’t, obviously, have a hash of the previous block. Fittingly, it is also known as the genesis block. A blockchain is highly resistant to modification. Modifying a single block requires modification of all the subsequent blocks.
Here is a comprehensive beginner’s guide to blockchain programmingfor those interested in instantly getting started with the blockchain technology.
- Audit Trails
Security is always a top priority for financial institutions. Although banks spend millions of dollars to keep financial information secure, not every business is privileged to do so, especially smaller ones. As such, they are at a higher risk of losing vital financial details in undesirable scenarios.
Blockchain technology automatically creates a record whenever someone tries to access information. This allows parties with permission to check whether someone without permission tried to access the information or not.
- Automating Regulatory Compliance
One of the major highlights of blockchain technology is that it is possible to calibrate the same for different things. For example, to permit or report transactions of a distinct type according to some exact ruleset.
It will be especially useful for banks for automating regulatory reporting and/or transaction authorization using the blockchain technology.
- Cross-Border Payments
In addition to being prone to errors and costly, the global payments sector is vulnerable to money laundering. Sending and receiving money from one part of the world to the other takes as little as several days to accomplish.
Blockchain technology is already offering fast and secure solutions to transfer money in collaboration with big remittance companies to the likes of Abra and Bitspark. With blockchain technology, these remittance firms offer end-to-end blockchain-powered remittance services.
Back in 2004, Santander – a Spanish multinational commercial bank – became one of the first banks to integrate blockchain in their payments app. It allowed the bank’s customers to make international payments round the clock and clearing the same on the very next day.
- Digital Identity
For now, digital identity is the digital form of an individual’s personal identity. However, that is changing with the blockchain technology. At present, any typical person possesses a number of personal identity cards and certificates, such as a driver’s license and social security ID.
Blockchain ID is a new form of digital ID that can potentially serve as a single replacement for all types of identity cards. Such an ID will be open-source, protected by a ledger of transparent account, and secured by the blockchain technology.
Transactions made via cryptographic keys, known as push transactions allow the involved parties to have ownership rights and require parties to have private keys for digital assets.
It makes up for a new and more secure way of managing identity in the digital ecosphere. Users are prevented from sharing vulnerable personal information without being restricted to make transactions.
Companies and organizations from whom we purchase from sell our details to advertisers for sending their ads. Blockchain technology disallows this practice by creating a protected data point where the user encrypts only the information that is required; nothing more, nothing less.
Another exciting digital identity possibility spawn by blockchain technology is the creation of digital passports. The first-ever digital passport was launched in October 2014 on Github. It could help owners identify themselves online as well as offline.
Like digital passports, blockchain technology can only be used for making reliable and encrypted birth, death, wedding, and other vital certificates.
- Financial Institutions
Anything digital can be easily replicated, including files, music, and videos. However, blockchain introduced digital code that can’t be copied, something like digital property. It has led to the development of digital coins that can serve as a stock in companies.
Because blockchain databases are built from the transaction history, accounting and auditing firms are already finding blockchain technology useful in various ways. For banks, blockchain technology can make reporting hefty financial transactions less complex and easier.
Gaming has become an integral part of modern society. In one way or another, it affects society. Another interesting application of blockchain technology is in video gaming. Released in February 2014, Huntercoin became the first game to implement blockchain technology.
Then, in 2017 another blockchain-powered game dubbed CryptoKitties was unveiled. It succeeded in demonstrating how blockchains can be used for cataloging game assets, a form of digital assets.
A major milestone in the blockchain-gaming collaboration was achieved with the formation of Blockchain Game Alliancein September 2018. Supported by big gaming brands like Fig and Ubisoft, the association’s key objective is to promote the use of blockchain in gaming.
- Government Applications
There are three main aspects of blockchain technology, namely:
- The blockchain network
- The cryptographic key
- Transaction authorization
Each of them has distinct purposes to serve governments, such as:
- Deciding who can and who can’t act as part of the blockchain network
- Ownership rights involving cryptographic key generation, possession, loss, replacement, and revocation
- Regulating and authorizing transactions (it can be a grand business opportunity for blockchain developers)
Blockchain technology facilitates self-organization by offering a self-management platform for governments. Nonetheless, it can also be extended to become usable by agencies, companies, foundations, NGOs, and even individual citizens. Involved parties can exchange information on a global and transparent channel.
Introduction of smart contracts can possibly ensure that electorates are elected by the people, for whom they are meant to serve. These contracts will ensure that electors will only get paid when they do what was demanded by the electorate rather than meeting the expectations of the funder.
- Insurance Claims Processing
Evidently, insurance claims processing is a time-consuming and unappreciated procedure. Insurance processors have to rigorously go through abandoned policies, fragmented data sources, fraudulent claims, etc. and then manually process insurance claims.
The blockchain technology offers a risk-free management system with high transparency to deal with claims processing. The encryption properties of blockchain technology enable insurers to seize the ownership of assets to be insured without any error. No more thankless work.
- Inter-Organizational Data Management
Another niche that is transformed by blockchain technology as a system record is the way in which information is collected and stored.
With blockchain technology, there is no need for maintaining a database, albeit it is a process of managing a system of record. This results in making inter-organization data management easier, cheaper, and effective.
- IoT (Internet-of-Things)
According to Forbes, 12.86 bn IoT sensors and devices will be available to consumers by 2020. IoT is no more a soon-to-come technology. It has already come out of the laboratory, received a green signal for production, and making its way into society.
Any home appliance becomes a smart appliance when given the ability to turn on or off automatically as per the conditions and is connected to the Internet and other smart appliances. In short, it gives you more control and ability than before.
Interestingly, blockchain technology can have a big impact on IoT. For personal use, IoT devices can make everyday living better. Nonetheless, governments and city authorities can use IoT for developing cleaner environments, efficient ways of energy consumption, and much more.
- Smart Contracting
Numerous consortiums are busy developing their own distinct smart contracting platforms. Smart contracts use documents and information stored in blockchains for supporting complex, legal agreements.
One notable example is Ethereum, whose main objective is to offer a platform for smart contract code that also includes programs for controlling blockchain assets, which are executed by some blockchain protocol and run on the Ethereum network.
Humongous investments are made in smart contracting platforms by big brands and leading insurance companies. The main idea is to code transactions of any complexity by applying business logic on a blockchain followed by authorization by the network running the code.
- Supply Chain
A wide number of efforts are already initiated for employing blockchain technology in supply chain logistics and supply chain management. BiTA, a contraction for Blockchain in Transport Alliance is working towards developing open standards for supply chain processes.
Hyperledger Grid is busy developing open components for blockchain supply chain solutions. IBM and Walmart have joined forces to run a trial for using a blockchain-powered system for supply chain monitoring.
A cryptocurrency can be understood as a digital bearer bond. Unique keys are required to control code for expressing ownership rights, and tokenization and ownership of tokens will represent a stock that can be a physical item or some sort of digital asset.
This would not only change the way in which trading happens but also the rules governing how such instruments must be transacted using a blockchain protocol.
Blockchain technology is not only changing the way we trade but also working to make it more efficient. A ‘T+3’ trade is a trade that is followed by 3 days before the trade is settled. With blockchain technology though, trade is a settlement. Hence, the equation becomes ‘T+0’.
All blockchain-based transactions require authentication via a digital token. These tokens are proving out to be immensely useful in several fields, most notably anti-counterfeiting, fraud detection, intellectual property, and supply chain management.
Blockchain is a game-changing technology but, “with great power, comes great responsibility.” Industry leaders are already toying with a lot of great ideas that can revolutionize various aspects of digital interaction and make the world a better place.
Although there is no surety as to what the endgame would look like, the thing that’s pretty sure is that it will turn out to be a better and safer way of maintaining digital identity, records, and transactions. Plus, with more and more investment and research, the possibilities are endless.Check out these best Blockchain tutorialsto step up your game and get to the next level of digital awesomeness!