Although blockchain technology is becoming increasingly common, it can be quite difficult to understand its intricacies and possible applications. While it is quite prominent in the world of cryptocurrency, it can be challenging to understand why blockchain has garnered major interest across multiple industry segments.
Basically, there are three main elements of blockchain technology to understand:
Blockchain isn’t bitcoin
One of the common misconceptions about blockchain technology is that people often consider it to be a synonym for bitcoins. This becomes a problem as people tend to associate bitcoin’s flaws as the same for blockchain.
Bitcoin is not entirely based on blockchain technology, but it does make use of it. Initially, blockchain was crafted to be a method of confirming and monitoring bitcoin transactions. It’s fair to say the technology has since become incredibly diverse and varied in its applications.
An accurate comparison towards understanding the difference between blockchain and bitcoin would be the association of email with the internet. Although one of the first real-world applications of the internet was email, today the internet is capable of a whole lot more.
Blockchain isn’t just for transactions
A blockchain is basically a record of an immutable database which is accessed and controlled through a decentralized model. This ensures a high degree of security as it is secured using complex algorithms and due to its decentralized database, users are immediately able to tell if any suspicious and illegal activity has taken place.
This makes it incredibly useful for recording transactions, but that is not the extent of its applications. The healthcare industry, for example, can utilize blockchain technology to ensure that patient data is kept private and patients have the ability to have control over who has access to their data.
Other potential uses include:
- Artists can receive credit for their artwork by giving it a block on a blockchain.
- It can speed up the process of smart contracts.
- It can confirm impressions for advertisements.
- It can reward customers with tokens on loyalty platforms.
Obviously, these do not encompass all applications of blockchain technology and what it can accomplish with data. This segues nicely into our final point.
It puts people in charge of their data
For the past decade, one of the major issues faced by business has been customer privacy. Several social media giants have come under fire for profiting off of users by selling their user data to advertisers. Facial recognition companies have had their share of legal troubles as well.
Blockchain technology is an effective solution to such privacy concerns as it gives people control over their own data. By having control over their personal data, such as identification documents or original creative pieces on a blockchain, users will be able to monitor and choose exactly who can access their data and how they wish to profit from offering their personal data.
Blockchain has the potential to create a world that is more equitable. Where customers, advertisers and businesses have outlined and clear instructions to data usage and access. This is key to understanding blockchain, it is not a new technology but rather a new way of ‘handling’ data.