Blockchain technology has far-reaching applications across many industries.
It is already being used to facilitate identity management, smart contracts, supply chain analysis, and much more. It was invented in the year 2008 by Satoshi Nakamoto. Although it is more commonly known because of its use in financial instruments and services like cryptocurrency, the use of blockchain technology has resulted in key and significant changes in various industries all across the world.
What is Blockchain Technology
A blockchain is an open, immutable and shared ledger or database that is used for recording transactions, tracking assets and building trust. Its purpose is to solve the problem of double records without the need for a centralized server. The data is stored in the form of blocks, linked on top of one another thus forming a chain of blocks. Each block contains data that is time-stamped marking when the data was made and/or edited.
Blockchain is more commonly used for the secure transfer of items like money, property, contracts, etc. without requiring a third-party intermediary like the bank or the government. The technology works using a peer-to-peer network that is completely decentralized. These records cannot be modified and therefore offer a high standard in security, as well as ensuring transparency.
Keys elements of Blockchain technology
1. Distributed ledger technology
Each network participant has access to the distributed ledger and its immutable record of transactions. Within this shared ledger, all transactions are recorded only once, eliminating the duplication of data records.
The elimination of intermediaries reduces the complexity and costs and allows the automation of a large number of business processes.
2. Records are immutable
Immutable means that no participant can modify or tamper with a transaction after it’s been recorded to the shared ledger. If a transaction record includes an error, a new transaction is then set up to reverse the error, and both transactions are made visible.
3. Smart contracts
Another capability of blockchain that vastly enhances its uses is smart contracts. Smart contracts are automated, verifiable and transparent. These are contracts that are programmed into lines of code and embedded on to a blockchain.
This program or set of code contains all the terms and conditions, rules, expiry dates and other relevant information required for its fulfillment. Once these criteria are met, the contract executes automatically.
4. Tokenization of assets
Asset tokenization on the blockchain is one of the most trending uses for this technology. What this involves is using digital tokens to establish ownership of real assets. This has several benefits from speeding up the transaction, increasing liquidity and reducing the time taken to trade. Almost, everything can be tokenized as an asset. From paintings to company stocks to diamonds to property, you can convert the rights to a digital token.
The potential of using blockchain technology in various fields
Far too often hospitals and clinics have to deal with incorrect or incomplete patient records as a result of inconsistent data handling processes. Healthcare services can use the blockchain technology as a means of facilitating data sharing while providing authentication and maintaining confidentiality.
This industry has been the most talked about when it comes to fraud and scams related to property disputes. It could streamline transactions with complete transparency and accuracy, thus leading to a decrease in scams and fraud rates.
There have been huge transitions and movements from traditional banking to more specialized online services. Cumbersome issues like delayed transactions, data theft, and security concerns can be resolved with blockchain.
There have been several disparities when it comes to voting in a democratic country. The use of blockchain technology could streamline this process. Transparency could be maintained when it comes to the number of votes cast and the count. Blockchain could help in maintaining the real identification of voters and thus legitimate voting practices should be followed.
Blockchain can also be used to promote transparency during fundraising and donation campaigns while providing a means to track the origin of funds and detect if those funds are used for the right purposes.
Nowadays, it is very easy for people to copy others’ original artistic or literary work, which is quite harmful to creators. If the blockchain can be used in this field, the writers’ and artists’ copyrights and works can be protected.