Narender Yadav / June 4, 2019
If you have been following banking, investing, or cryptocurrency recently, you may be familiar with “Blockchain,” the record-keeping technology behind Bitcoin. What is Blockchain? Blockchain consists of chunks of a database distributed across multiple computers at the same time. It keeps on adding new sets of data, or ‘blocks’ regularly. Each block contains a timestamp and a link to the previous block hence they actually form a chain.
So, what’s the purpose of Blockchain? What is it used for, and why is it needed? Blockchain has endless applications across various industries. The initial use-case was for provenance. It proves you own something digital. You own one Bitcoin. You own digital copies of your health records. Blockchain gives us the age of digital ownership. We live in a digital world. We order gifts and buy online from retailers. Hence, Blockchain is important as it allows us to own digital goods, assets, and data.
Blockchain is a revolutionary technology. There is clear application in the field of cybersecurity. The safety of Blockchain technology for businesses lies in the fact that it is a distributed, rather than a centralized network. This means that to break into a data source, hackers need to break into all the computers in the distributed network at the same time. The computing power necessary to conduct such a hack has been compared by Collin Thompson to the equivalent of the “hashing power of a nation-state and all the tech companies therein to overcome more than 51% computational power of the network.”
Read More – 7 Real World Applications of Blockchain
Of course, blockchain is transforming a variety of industries. Let us look at five instances where blockchain technology has transformed industries.
Banking — Maintaining records efficiently has been a problem the banking and finance industry has been facing for years. Challenges have led to fraud, over-expenditure, and other problems.
With blockchain, banks will no longer need a segregated database. Instead, there will be a shared ledger among the participants. This helps add more security. The financial transactions will be safer as any changes will need the approval of all the parties involved. It will reduce the time of the transaction, especially international transactions. Waves which is a Blockchain platform has managed to run 190 transactions/second using Blockchain.
Another important application is in Smart Contracts. Smart contracts take into account set rules and penalties. They define who the asset will belong to under certain predefined conditions. This was a difficult task when done manually. With Blockchain, every part will be well-defined and well-coded, and the implementation will not require a third-party enforcement team. Trade becomes easier with Blockchain’s real-time reviewing abilities.
Internet Identity and DNS –The problems spoken of with DNS, public-key infrastructure, and other custom identity systems emerged as a direct result of trusting intermediaries and remote services. In the era of the internet, users would do well to trust nothing other than their machines. Blockchain help to onboard an experience from an end-to-end design to a trust-to-trust design in the internet’s architecture. If applied correctly, this could change the way internet identity and DNS works.
Industrial IoT and Mesh Networking-As the number of connected devices in use skyrockets, there are a number of growing concerns, the most important being identity management. If connected devices talk to each other all the time, they need protocols and sound rules and systems to ensure they aren’t interacting with fraudulent devices or hackers. Fortunately, blockchain is well-suited to solve this problem.
Since Blockchain is designed to secure data and transactions through the use of public and private keys, it is well-suited to manage personal identity in the IoT ecosystem. It is also perfect for giving devices unique identities. For example, UniquID leverages Blockchain technology to automate device Identity Access Management (IAM). This helps protect business data while improving the efficiency of the access experience. They have created a protocol for Identity Access Management for secure machine-to-machine connection.
Cloud storage and computing- Blockchain cloud storage solutions take the user’s data and break it up into small chunks in a process called sharding. They also add a layer of security and distribute it throughout the network. This is done using Blockchain features like the hashing function, public/private key encryption, and transaction ledgers. If intruders try to hack into it, firstly, they only get encrypted data. Secondly, they get only a chunk of the data and not the whole file. This secures the document in blockchain based cloud storage. Many new companies like Sia, Amazon, and Storj have jumped into this new Blockchain cloud storage market and the data storage market looks ripe for disruption.
Stock Trading-Stock trades are often made in milliseconds by algorithms. Completing them involves coordinating payment and delivery among a mess of databases and then reconciling the records. Brokerages and financial companies take days to settle the entire transaction end-to-end. With blockchain’s distributed, tamper-proof ledgers, and immutable and transparent transaction records, the whole process could be sped up and simplified. For example, NASDAQ launched Linq, a blockchain-based private trading platform that lets private companies digitally represent their share ownership, even if they are not listed on a stock exchange. The system was successfully able to complete and record a private-securities transaction to a private investor recently. Blockchain has been featuring several other projects not only by NASDAQ but also on other stock exchanges across the world.
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There’s little doubt that blockchain will change the way of the business world. So many experts assert that blockchain is not a disruptive technology, but rather a foundational technology that will provide a real structure for all future transactions of any value.