The more we become acquainted with blockchain technology, the more use cases for business issues are discovered and developed. Many a time business requires trust applications to carry out an aspect of its work. Blockchain can then be utilised as an application platform which can build the underlying trust infrastructure of the system.
The first real application of blockchain technology was Bitcoin- a decentralised currency and payment system. But this doesn’t mean that the potential of the blockchain has to be limited to payment transactions, accounts, balances, or users. Its method of securing transactions through cryptographic methods means it can solve many use cases asides from just cryptocurrencies.
The properties of blockchain led to the creation and development of smart contracts- a service that is available on the Ethereum blockchain. In the case of Ethereum, developers can create their own, private cryptocurrencies and contract based applications through using a Turing-complete language. This then allows businesses to use this language to create their own rules, parameters and policies.
The Distributed Ledger Technology that underpins the blockchain can also offer multiple benefits to businesses where a high degree of trust is required for business transactions. Harnessing this technology can allow a reduction in costs and also provides the opportunity for businesses to build and maintain an infrastructure that can deliver at a much lower cost than traditional, centralised models.
Blockchain also can process transactions much faster than traditional platforms, because it doesn’t use a centralised infrastructure. While no system is ever totally secure from cyber attacks, the distributed nature of blockchain means that there is a previously unseen level of trust. The fact that entries on the blockchain cannot be edited or changed, as well as the fact that it is public amongst it users, means that it enjoys a high level of transparency.
Blockchain for currency
Since Bitcoin was invented in 2009, it has been growing in popularity and adoption on a global scale. For those businesses that seek a distributed trust mode, the Bitcoin consensus algorithm which is based on PoW ensures total neutrality. In PoW, transactions are gathered into blocks by miners and they can only be added to the blockchain if the miner can solve a cryptographic challenge. Solving this puzzle requires a lot of computational power and solving the puzzle can only be done by guessing, not by logic.
There are also other proof concepts that have been incorporated into other solutions, so as well as Proof of Work, there is Proof of Stake in Ethereum and Proof of Elapsed Time in Intel.
Both Bitcoin and blockchain sole a very old money problem that many other digital currencies tried and failed to solve in the past. This is the issue of double spending where the currency is spent twice due to issues on updating all of the nodes in the system. Bitcoin, through using distributed consensus, managed to solve this problem.
Another benefit that the blockchain has provided is the fact that transaction can be executed cross-border, in seconds and with minimum fees. It also removes the need to go through any third party entity or intermediary.
Both the US Government and the Venezuelan Government are currently exploring the possibility of creating their cryptocurrencies that are tailored specifically to their individual needs. Despite the success of Bitcoin and other currencies, the shortcomings on their design have somewhat limited the global adoption and the expansion of altcoins. For cryptocurrency to truly expand on a global scale, it will require overcoming governmental requirements and concerns including money laundering, illicit trades, volatile value and lack of recognition.
Blockchain and digital identities
There is a growing need to have a centralised database of verifiable identities and blockchain has the answer. Through using a decentralised digital identity system, a source of truth can be created where every single bit of data relating to the individuals’ credentials are included in the system through distributed consensus. This model is already being used by several large companies such as Microsoft and IBM. Users can have more control over their identity as it will only be shared with trusted entities, and entries cannot be tampered with in any way.
This makes significant improvements in the areas of accessibility, data privacy, and control over each individuals’ data. When it comes to enterprise, this model results in substantial reductions in identity management costs as well as easing the monitoring process and improving efficiency.
Blockchain for Real Estate
Smart contracts are a great use when it comes to the world of real estate. As they function as little programmes that will execute if certain requirements are met, they are perfect for the long and laborious process of buying or selling houses. Smart contracts were invented back in the 90’s and were then integrated into blockchain technology by Ethereum. In a smart contract, two or more parties agree on a sequence of conditional steps that are based on events.
Real estate transactions often involve multiple parties including owners, lenders, investors, and service providers. The transactions that need to occur between these entities can be complex and problematic especially when carried out on an existing centralised system. The difficulty comes from several factors including a lack of trust, fraud, and cumbersome bureaucratic processes. Blockchain technology offers the chance to have a transparent and immutable database that can also execute steps of the transaction with trust and efficiency.
These are just some of how blockchain technology can completely revolutionise the way in which many industries work. As adoption of this disruptive new technology increases, we can hope to see more and more use cases in the business world, emerging.