In some cases, a piece of technology doesn’t get the credit it deserves. Sometimes it’s because that technology is the supporting player for a bigger, flashier technology. Or it is still just an enigma — a little too ahead of its time for most people to grasp. That’s exactly why we are going to talk about blockchain. Because you may be asking yourself right now, “What is blockchain?” and this technology deserves your attention.
Blockchain was created to fill the need for an efficient, reliable and secure system for transactions. In a bold yet potentially foretelling statement, Manav Gupta’s e-book “Blockchain for Dummies” proclaims, “It has been said that blockchain will do for transactions what the Internet did for information. That’s pretty huge.”
In our increasingly technology-dependent world, more and more large transactions are going digital. And these trades can be incredibly vulnerable to cybercrimes. Gupta wrote, “The growth of ecommerce, online banking, and in-app purchases, and the increasing mobility of people around the world have fueled the growth of transaction volumes.”
Not only are these vulnerable to threats, but they tend to take a long time to be completed, due to the necessity of an intermediary that must confirm the transaction.
Blockchain solves all these issues. Simply put, this technology allows two parties to partake in secure digital transactions without a third party. A blockchain is like a ledger that will record these transactions in a completely encrypted fashion, as to protect participants from cybercriminals.
What is blockchain able to do for your business? A lot, actually. When a transaction is recorded in the blockchain’s publicly shared ledger, it is theoretically tamper-proof. A transaction can also be recorded quicker than ever before because there is no third party needed to verify it. The transactions are interdependent. Each transaction and independent nodes verify the previous transaction, preventing fraudulent requests from altering the blockchain or completing its process. Taking out the middleman in this process can save businesses money as well.
Blockchain can be used in a number of different kind of transactions, the most common of which is bitcoin. In case you missed it, my colleagues Aaron Walker and Andrew Zangre went head to head on the G2 Crowd blog with their opposing views of bitcoin. The two have since been separated and have made amends.
Unless you’ve been doing an obsessive amount of research for a certain article, the whole cryptocurrency thing can be a little tricky to understand. But Zangre offers an explanation even I could follow in his article, “Nevertheless, Bitcoin Persisted (A Begrudged Examination).”
“Bitcoin is a ‘peer-to-peer electronic cash system,’ according to the core white paper on the bitcoin homepage. Owners choose a preferred ‘wallet’ in the form of an installed software or a third-party-hosted web platform, and this tool serves to store, receive and send currency to others in the form of unique, coded addresses. Transactions are performed within encrypted ‘blocks’ on the internet, and new blocks are constantly generated to meet the growing need.”
Bitcoin transactions are recorded and time-stamped in a blockchain, which act as shared ledgers for these translation. Some people mistakenly believe that blockchain and bitcoin are the same thing. But blockchain is like an operating system that allows bitcoin transactions to take place. While bitcoin may have been the first use of blockchain, there are so many more uses for this piece of technology.
Other uses for blockchain
Yet another colleague, Jasmine Lee, scratched the surface of these additional functions in her article, “Is Blockchain the New Frontier?” Spoiler alert – blockchain has become so much more than the backbone of bitcoin. It is boldly going where no technology has gone before.
Okay, that may be an exaggeration, but I couldn’t resist a good pop culture reference. But in all seriousness, blockchain is allowing us to do some seriously cool things, outside of bitcoin.
One of the most important things about blockchain is the encryption it offers for digital transactions. Industries such as health care, which requires extreme privacy with its records, can greatly benefit from this added level of security. Meet DokChain – a health care blockchain solution. As Jasmine writes, “DokChain can accurately and efficiently conduct identity management. DokChain can also lean on blockchain’s utilization of smart contracts, to speed up medical transactions and communication.” Blockchains would also help to verify prescriptions and the supply management of pharmaceuticals.
Blockchain can help to completely change the game when it comes to voting. The term voter fraud has been a buzzword in the news for the last few years. Well, integrating blockchain into our voting process means that we’d be hearing a lot less about voter fraud accusations.
When a vote is recorded in the blockchain, it cannot be deleted or changed without evidence of tampering. Each of these entries would have its own unique lock and key attached to it, which could be used to authenticate a voter’s identity. That means that foul play would be virtually impossible.
With the introduction of music streaming, ownership rights and royalty distribution have become prominent issues in the music industry. Blockchains can help to create a thorough and accurate decentralized database of music rights. This ledger would provide transparent transmission of artist royalties. As Blockgeeks’ Ameer Rosic writes, “Players would be paid with digital currency according to the specified terms of the contract.”
Internet of Things (IoT)
As it turns out, IoT and blockchain are a match made in heaven. IoT is the term for embedding internet in everyday objects, which allows them to send and receive data. These IoT-fueled objects are slowly infiltrating our homes under the pseudonym of smart appliances, presenting new security risks.
Blockchain systems can – you guessed it – add an extra level of security to these appliances. Let’s say you have a smart washing machine. It could send a text straight to your phone, notifying you that your current load of laundry is done. Think of the benefits of a device like this. You can control appliances from home, saving yourself a lofty energy bill. Blockchains allow that remote ownership to stay secure.
A group of my colleagues on G2 Crowd’s research team wrote about the top digital transformation trends for 2018. My coworker Aaron (the one who passionately defended Bitcoin’s honor) predicts blockchain will be on the rise this year. He wrote in his article, “Digital Trends: Blockchain,” “The blockchain market was worth more than $400 million in 2017 and is expected to grow to more than $7.6 billion by 2022.” As expected, he sees blockchain making huge waves in security and the financial field in 2018.
Long story short, there’s no stopping this technology right now. Businesses that hop on the blockchain train early will reap huge benefits, and there’s no telling what’s on the horizon.
Learn more about AI, machine learning, cybersecurity and IoT in our recent feature on Digital Trends. You can also explore some of the companies offering B2B solutions in these spaces by exploring their respective categories on G2 Crowd.