Applications of Blockchain Technology: Not Just Bitcoin
The blockchain is something you’ve likely been hearing more and more about. Many people are vaguely familiar with the concept of the blockchain as a means of recording and distributing digital information, but may not be familiar with its inner workings, or the advantages it brings.
Although blockchain technology is perhaps most closely associated with cryptocurrencies, it in fact has applications that can be applied to many practices and industries, making it a beneficial, and potentially disruptive technology. Before we explore some of the specific ways the blockchain is transforming traditional processes, let’s take a brief overview of its inherent properties.
What is the Blockchain and How Does it Work?
According to Don & Alex Tapscott, authors of ‘Blockchain Revolution’, the blockchain is “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions, but virtually everything of value.”
What makes the blockchain unique is that it is a decentralized system that relies not upon one governing body, but upon thousands, or even millions, of computers around the internet. Each new record is a block that becomes stored in the records of each of these computers, making it nearly impossible to refute or corrupt the data. The time stamped data is not owned by any one entity, and has even been referred to as a ‘new type of internet’.
While a simple Google search will net you many more detailed explanations of the mechanics of the blockchain, the main takeaway is that the blockchain offers three unique and game-changing features:
- It is decentralized, which means it is in the hands of the population at large, and not a centralized body, which could exploit data or record-keeping for profit.
- It is transparent, eliminating secrecy that surrounds transactions.
- It is immutable, and therefore no credible challenge can be made to its accuracy.
Applications of the Blockchain
These characteristics make the blockchain ideally suited to be the transactional engine of cryptocurrencies, but the usage doesn’t end there. In a world where data is central to nearly everything we do the applications are endless. The results are capable of fostering not just efficiency and accuracy, but ethical benefits as well.
Because of the decentralized nature of the blockchain, it takes power away from governing bodies like banks and other money transferring services, putting it in the hands of the many. This is perhaps the central tenant that drove its creation, and the benefits are real.
For those who regularly transfer money to relatives in impoverished nations, transaction fees have historically been a fact of life. With blockchain technology, the middleman is eliminated, meaning the full sum of money goes to the recipient. In fact, some recent large scale refugee relief efforts have been conducted through the blockchain, bypassing potentially corrupt bodies that stood between senders and receivers. For these same reasons, the blockchain has been an economic boon to remote areas where geographical and political challenges have historically been a hurdle for business development.
Similarly, blockchain technology can be utilized in the sharing economy, allowing for the sharing of rides or beds without the need for centralized brokers like Uber or AirBnB, effectively disrupting the disrupters.
The transparency of the blockchain makes it a valuable source of record keeping. Conducting elections through the blockchain makes it virtually impossible to hide or embellish votes. Compliance with tax and accounting laws, as well as workers’ rights legislation can be assured through visible blockchain records, and it can prove an invaluable source of data collection in the medical field as well.
There are applications in supply management too, eliminating the need for excessive paperwork and allowing shippers and receivers to track the whereabouts of cargo in real-time. For consumers who wish to verify the country of origin of artisan coffee, confirm the vintage of a bottle of wine or track the path of ‘authentic’ memorabilia, blockchain records allow them access to a complete ledger of data surrounding the product path.
The applications are vast, and will continue to touch almost all aspects of the economy, and society as a whole. Blockchain can be used to facilitate stock trades, shine light upon the sale of weapons, help artists track the usage of their intellectual property, monitor quality control, administer loyalty reward programs, and record title transfers of real estate and other assets, including wills and inheritances.
As blockchain technology continues to be better understood, and more widely utilized, expect to hear more about the transformative effects it is having on a wide range of industries and practices.