How Businesses are Creatively using the Technology of Blockchain?
No digital record keeping technology is as secure as Blockchain despite the fact that it works without a central authority. But how? When deconstructing the term Blockchain, what we get are block and chain. A block is the current part of a Blockchain and, it records information related to transactions. When it’s completed, a new one is generated. The completed block than becomes a part of the chain forming the term Blockchain. There are countless blocks connected to each other in a proper liner and chronological order. Every block carries a hash of the previous block in the chain.
A Blockchain can contain the complete information related to specific transaction right from the genesis. No one can temper it as no one controls it. Contrary to it, tempering is possible with the currently available record keeping technologies which are centrally controlled.
Blockchain was initially created for Bitcoin by a person or (group of people) known as Satoishi Nakamoto in 2008. The same person or group of people also created Bitcoin, the first cryptocurrency in 2008. Blockchain was created as a core component of cryptocurrency for which it serves as a digital record keeping technology of all Bitcoin-related transactions on the network.
The Bitcoin’s Blockchain consensus, provenance, immutability and finality make every transaction transparent, secure, and tamper-proof. Luckily, they are also the most sought after attributes in other sorts of transactions to take place across industries, between two people or government and people.
In fact, using Blockchain in applications other than cryptocurrencies has already begun across industries and organizations. Here are examples to some of them.
Using Blockchain as a system of recording
The technology of Blockchain provides an opportunity to setup a strong system for digital identification because Blockchains are neither based on the accounts and permission of associated with accounts, nor are publicly owned digital asset, they are fully transparent public ledgers providing desired traceability to their origin. It provides a secure way to manage identity in the digital world. Blockchain lets users make a transaction of money or information without sharing too much vulnerable personal information. Also, Blockchain can be used to replicate a variety of identity cards, badges, and several others things.
Records kept in the form of paper can be tampered. Records can also be tempered if they are stored in a centrally controlled digital system. But this is just impossible when records are kept in the computers of everyone participating in a transaction. This is what Blockchain do. Data on Blockchain cannot be modified. A Blockchain is made of two things: a block and a chain. Each block containing the information is part of the previous block in the chain.
Consider following example
Above given blocks represent a country and inside them are the specific city-names representing the country. Also, each of the blogs has something called a hash; a set of characters (e.g. “2hi432AHA7H”). A Hash is derived from the information contained by a block. The block names as Australia has cities three cities Sydney, Tamworth and Goulburn. So the hash may be something like this “sytag000” (Technically it’s not the way a hash is created but we will go with just to get an idea.”)
Each of the blocks contains a hash from the previous block and a hash for a new block. See the example below:
Every following block contains the previous block’s hash which binds them together. It’s the actual force. Now, if someone adds a new city or change an existing with other to an existing block, say Australia, the hash will be changed. In result, it will not be the part of the chain. It will break the chain. Hash helps in making sure that no one can temper a block.
Blockchain can also be used for digital tokenization of unique physical items. A Blockchain based digital token is used to bind the physical and digital worlds. Businesses engaged in supply chain management, intellectual property, anti-counterfeiting, and fraud detection can use the technology in their applications.
Digital assets also belong to tokenization. Businesses can use ICOs to raise funds for investment. It’s similar to inviting people to invest in your business and an in return you offer them shares or stocks. Here ICOs are digital assets given as token just like a company provides share or stock. These tokens are exchangeable for the company services or as money later a certain date when the value increase.
Government and organizations have already dropped the idea of digital voting (particular for big reasons like electing a government) because the process can be tempered. Voting can be tempered or hackers can discover who a person voted for. But these concerned can completely be removed with Blockchain.
When implementing Blockchain for the same purpose, governments would be able to save millions of dollars spent in carrying out voting programs. People will no longer need to stand in long queues to get their turn of voting.
You may have already heard of Google Drive, Dropbox, and other similar cloud storages, where you can put all your digital files. But the problem with them is that governments can force a service provider to disclose what you have stored there.
This can completely be changed with Blockchain as it’s a decentralized technology and, the data is stored on different computers on the network with the high level of encryption. This will reduce the cost of storage.
John, the tenant of Maya, hasn’t paid his rent for last six months. Every time Maya question he promises to pay later. She is helpless. She cannot also afford a layer and wait for another six months or a year to enforce action. In this case she will have no choice but to persuade John.
We need to make John pay Maya through a time based trigger. We are already using the similar type of time based-triggers in our calendar that uses to get notifications for predefined events.
Here Blockchain can be deployed on computers of all involved parties. Banks of both Maya and John will be parts of that privet Blockchain. Maya will sign a coded contract (s smart contract). When deployed, both Maya’s and Johan’s banks will have a copy. On the payment date when the clock ticks 12.00, the agreed amount will automatically get transferred from John to Maya’s account.
This is how smart contract work. It’s a useful tool of Blockchain service to keep transparency and trust in transactions. Once created, no party will be able to breach it until it ends.