How The Blockchain Changed Everything
Perhaps the most revolutionary development since the advent of the Internet, Blockchain technology has the potential to disrupt and radically transform almost every industry on a global scale. Essentially a decentralised database that’s immutable, a Blockchain is a public ledger that is secured by cryptography.
Blockchain Basics
The data in a Blockchain is arranged in – you guessed it – blocks. The blocks are serially linked to each other forming a chain of blocks (the name should be obvious by now). These blocks have two versions of data:
- A plain version that’s intelligible and the second one is an encrypted version that’s derived from the plain data.
- This encrypted version of the data is unique to the plain data it’s derived from, and is called a hash.
- Any change to plain data in any block is instantly noticeable because then the encrypted version of the data (hash) doesn’t correspond with the altered data.
- Even if you tried to create a new encrypted version from the altered data to add to the block, the entire Blockchain after the altered block would have to be changed. These blocks are serially linked by cryptography and any change to one block changes all succeeding blocks.
Let’s make this clear right at the start – changing Blockchain data is a futile and expensive exercise. Estimates have pegged the cost of altering one block on bitcoin’s blockchain at $30 billion (in terms of hardware and equipment you’d need to successfully pull it off). Finally, after this grueling ordeal and after expending so much money on a trifling block of cryptographically secure data, one has to overpower the entire network and replace the thousands of Blockchain copies held in servers throughout the world with the altered copy to create consensus and pass off the altered record as real. This is almost impossible and thus, the Blockchain is tamper proof. Also, no block can be simply deleted as blocks are linked together by a cryptographic technique. Any deletion would create an easily detectable invalid Blockchain.
Blockchain technology turns trust based central records vulnerable to manipulation into transparent, independently verifiable and immutable records. Here are some Blockchain use cases that could change the face of the world as we know it:
Blockchain technology might very well be the key to a golden future.
Immutable records
As a record of data that’s tamper proof, the Blockchain could be used to store records of all sorts from land records to healthcare data.
- Land records, particularly in developing economies, are tenuous and vulnerable to manipulation by corrupt authorities in charge. If land records are stored on the Blockchain instead, no one can tamper with the records while everyone can verify ownership of any asset.
- For instance, the government of Telangana in India is about to record all land records on a Blockchain.
- If all healthcare data is aggregated on a Blockchain, it could massively simplify and enhance the quality of healthcare by offering health workers ready access to accurate information at all times.
- Further, big corporations can store all data on Blockchains, putting an end to reams of confusing paper records and time wasted in passing information through the organisation as the Blockchain can be accessed by anyone in real time.
- Even governments could store records of resolutions, bills and laws on Blockchains, thus creating an incorruptible backup.
- With legal documents, records, evidence and dispositions stored on Blockchains, the legal system can do away with most of their paperwork because Blockchain would be able to provide a historical record of litigation and previous trials.
Smart contracts
Blockchain technology could pave the way for ‘Smart Contracts’ that automatically execute themselves. Unlike physical contracts where the risks of fraud and breach of terms are very real, a ‘Smart Contract ‘ doesn’t allow cheating or lapses.
This is how a ‘Smart Contract’ works:
- A digital contract specifying terms is stored on the Blockchain and can be viewed by anyone.
- The contract executes itself after specified conditions are met. For example, if you want to rent out an apartment, you can create a ‘Smart Contract’ and put it out on a Blockchain for everyone to see. Anyone can then get access to a digital entry key to your apartment after paying you the rent, say, a specified amount of cryptocurrency accepted on the chain (or even by adding a digital receipt of fiat money transferred to the Blockchain).
Smart Contracts are hassle free automated contracts that greatly simplify enforcement.
This could change contracts from social agreements enforced by central authorities into ones that are automated and execute irreversibly, while eliminating any possibility of lapses or disputes. In this regard alone, Blockchain technology could save businesses and corporations billions of dollars by making the process of floating tenders much more efficient and by saving time and money spent in cases of disputes or litigation.
Contracts on the Blockchain also root out corruption. For example, the contracts can be so designed that funds are released only if the work proceeds apace and meets quality standards. Contractors would have to furnish proof of satisfactory progress of work on the Blockchain where it could be verified by anyone with access.
The regulators can also be given voting powers that determines if more funds are released or the contractor is penalised. Thus, Blockchain technology could bring a much needed transparency to contracts that are currently subject to considerable abuse by governments worldwide.
Any kind of conditional transaction can be coded as a ‘Smart Contract’. Thus, microtransactions on apps could be designed as smart contracts which makes sure that no user is charged unfairly for services unbought.
Also, Blockchain technology could play a vital role in enabling the Internet of Things (IoT) by securing and fireproofing connected devices against hacks. All in all, Blockchain technology has the potential to disrupt and revolutionise the way transactions take place. Ethereum is a popular Blockchain based platform that is a pioneer in the development of ‘Smart Contracts’. Anyone can create their own Blockchain and ‘Smart Contracts’ with custom rules using the platform.
Logistics and big data
Blockchain technology has the potential to dramatically improve logistics across sectors.
Large organisations face a daunting challenge in effective supply chain management. There is delay and distortion as information is relayed through multiple people and systems within the supply chain. This results in undue costs and loss of time. Logistical problems can be effectively solved by the Blockchain as information recorded is immediately relayed to all levels and is dependable. For example, any sale of a product would immediately be reflected on the Blockchain, helping organisations manage the supply chain in real time. Blockchain also helps companies manage huge amounts of data by reliably automating any operation on. For instance, Blockchain enables banks to manage colossal amounts of data. Many banks now use Blockchain technology to settle transactions on their networks.
Decentralised platforms
Traditionally, agricultural produce is brought to the market by middle men. Real estate is managed by brokers on behalf of stakeholders. Intermediaries thrive in a centralised economic system and make money by building centralised platforms and charging commissions.
This could all change with Blockchain technology. You can list your products on a Blockchain where everyone can view it and transactions can occur without the involvement of intermediaries.
E-commerce companies already act as a marketplace directly connecting buyers to sellers. Social media sites connect people. Travel service aggregators connect travellers to travel services.
Also, most social networks and corporations profit exploiting private user data by pitching such data to advertising agencies. All of this would change with decentralised platforms where individual users would have exclusive access to their information and could also earn profits for themselves by agreeing to share personal data. Such decentralised platforms have already started cropping up and allow users to monetise their data. Steemit, one such decentralised platform is quite popular.
Though development is still at a nascent stage, Blockchains could very well be the key to a fair, equitable society and a golden era of human prosperity. Blockchain technology can save valuable time that is lost in paperwork that leaves room for human error. It can unlock human potential and let people work on more creative projects rather than spending their time in revalidating and documenting each and every piece of record!