Blockchain is best known for being the technology behind Bitcoin, a cryptocurrency that was created in 2009. Since then, blockchain technology has mainly been associated with financial sectors and banking where it helps to secure transactions and generally improve banking systems.
Being a secure technology for transfers, blockchain is not just disrupting the banking industry, but changing its core, affecting important questions such as financial fraud, transaction tracking, financial inclusion, etc. But there are more ways blockchain technology can be applied in different business sectors.
Bitcoin’s popularity helped to show the business world numerous possibilities of blockchain application. It’s a transparent and secure way to store the information which creates countless possibilities to use it in almost any industry.
What is blockchain?
It can be rather hard to understand what blockchain is, but the principle of this technology is the growing list of blocks that are linked using cryptography. Once a block has been approved by the network it can’t be modified. You can enter a new block with the information overwriting the previous one, but the network will have access to the earlier blocks.
It is designed to create trust between transaction parties. Since the blocks are operated from decentralized platform blockchain is resistant to fraud which makes it an attractive technology for companies operating in risky markets that deal with sensitive information. Added security by decentralizing is exactly why the financial industry was the first one to benefit from this technology.
To ensure data security, all information in the blockchain is encrypted with mathematical cryptography, which only allows you to access your own information with your private key. That makes any kind of fraud impossible. The keys are absurdly long combinations of numbers and letters that would take years to decrypt. The system uses your private key to encrypt the block and put your signature on it.
Blockchain is a decentralized system that doesn’t require any governance from the third-party as all transactions happen from one person to the other. It allows the information to be distributed but not copied and this is what makes it unique. As blockchain consists of several members, each member has an equally valid voice and all the decisions are taken by the majority of voices.
Blockchain doesn’t carry transaction costs. It is a simple yet subtle way to transfer information from A to B in a secure manner- no wonder why it has been widely adopted by the financial industry,and the best part is that it can be used in many more ways.
So, what are the benefits?
Blockchain technology is built on the principles of decentralization, immutability, and transparency. These are a few of the ways how it can benefit you.
Information verification.Once the information has been submitted to the blockchain it can’t be altered meaning that there is no way identity can be stolen if there is a record for the person as there can only be one for each person. This can be used for voting, fact authenticity, ownership rights, police, and court records.
Currency transfersAs mentioned earlier blockchain provides financial institutions with a secure and transparent way to make peer-to-peer transfers. As it has no (or very little) transaction cost it may become a threat to third parties that take a cut when transaction is made.
Smart contractsBlockchain can help to eliminate third-party and human involvement where you need to make sure that all terms of the contract are fulfilled. So it is an algorithm that will run only when all requirements are met. This can be widely used in the insurance industry to eliminate the level of insurance fraud.
Cloud storage. Blockchain will allow storing large amounts of information in a safe way and at a lower cost. Encrypting and distributing it in small bits of data among the devices in your network will protect sensitive information and, as you don’t have a third-party storage provider, it will cut down the price for the cloud.
Sharing economy. The boom of sharing economy companies gives blockchain a great chance to threaten the biggest market players like Airbnb, Uber, Fiverr, Etsy and others by providing users with a safe way to perform direct peer-to-peer transactions and avoid third-party regulating intermediary.
The only limit to the usage of blockchain technology is imagination and more and more businesses prove how useful it can be to any industry.
In the last ten years that has been around, blockchain technology has proven to be a secure and trustworthy system implemented by many companies all over the world. Even though blockchain is mostly known to be used in fintech and banking thanks to Bitcoin, there are other industries that have already benefited from implementation. These are examples of business in non-financial sectors using blockchain operations.
Agora has developed a secure and transparent platform for voting. You can imagine how sensitive personal information is and what effect fraud in voting can cause. By using blockchain technology Agora provides a next-generation digital voting platform for governments and organizations.
Learning Machine in collaboration with MIT Media Lab created a system that provides digital credentials in the blockchain. These records use a global decentralized network for verification and don’t require third-party involvement to send and verify them.
Storj provides decentralized cloud storage which makes it unhackable. As mentioned above, blockchain greatly benefits the security of cloud-based storage. The company is open about the code and operations and ensures the security with Client-side AES-256-GCM encryption on every file.
The Estonian government partnered with Eriksson to create a data center system to move public records to cloud storage. That would imply transmissions of data transactions every second that need to be entered into blockchain and be distributed across the network.
BitGive is bringing transparency of blockchain technology to charity organizations. Their simple, but important, mission is to leverage the power of blockchain to improve public health and the environment worldwide.
OpenBazaar is one of the brightest examples of an online marketplace for goods and services with no middleman. Using Bitcoin as the leading cryptocurrency it offers peer-to-peer trading without service fees.
Propy is a blockchain-based smart contract company that aims at providing home buyers with a secure way to perform operations and minimize the risk of fraud in the real estate market, which is beneficial for both buyers and sellers.
As innovative as blockchain technology may sound, it is a simplified mechanism of securing transactions while bringing the parties to the highest level of accountability. It provides business with crucial elements of transparency, security, and efficiency.
The application of blockchain technology across various industries shows the vast potential for its development. It has proven to have more applications than just in Bitcoin and has a lot of opportunities to go beyond banking and fintech. As the whole process is encrypted with mathematical cryptography it prevents data from being stolen, making it a safe system to transfer any kind of information.