Simply put, blockchain is the technology behind Bitcoin. However, the technology has come a long way since its introduction as the distributed ledger behind Bitcoin transactions. Blockchain applications go beyond cash and currency. In other words, blockchain is a chain-like database that’s made up of “blocks” of data stored on a network of thousands of computers—hence the name blockchain.
It would be fascinating to trace the evolution of this revolutionary technology poised to change the world as we know it. Let’s dig in.
History of blockchain
Blockchain technology, as we all know, became popular with the launch of Bitcoin, the world’s first cryptocurrency. The technology was the brainchild of Bitcoin creator Satoshi Nakamoto. However, many of the technologies on which the blockchain is based have a richer history than Bitcoin, which appeared in 2009.
Scientists Stuart Haber and W. Scott Stornetta originally conceptualized the blockchain in 1991. They developed a cryptographically secured blockchain system to store time-stamped documents. However, the groundwork for blockchain was laid in 1992 when they upgraded their system and incorporated Merkle trees. The scientists improvised their technology by enabling the collection of more documents on a single block. Merkle tree, also known as a hash tree, is a data structure used for data verification and synchronization.
Blockchain applications in banking, healthcare, and beyond
Blockchains are best known for their role in the creation and functionality of cryptos. However, contrary to popular perception, blockchain’s utility goes beyond the cryptosphere. We will discuss some of the applications of blockchain in industries ranging from banking to health care.
Blockchain redefines banking
Blockchain technology knows no crypto boundaries. Not surprisingly, the banking industry has been among the first to realize blockchain’s potential. Practically speaking, blockchain improvises traditional banking methods like international payments, securities trading, loan offerings, credit monitoring, and fundraising. Blockchain technology pips conventional banking in cross-border payments as it provides end-to-end remittance services without intermediaries. Several companies offer remittance services via blockchain, which can make international remittances within a 24-hour time frame.
A shot in the arm for the healthcare industry
The healthcare industry has benefited immensely from blockchain technology. Blockchain in healthcare is in a very nascent stage, with many global firms testing the water first. But blockchain solutions have shown the potential to improve the healthcare industry and solve several existing problems. In countries like Estonia, one of the world’s most digitally progressive countries, blockchain network is integrated into the healthcare sector to preserve and exchange patient data through hospitals, diagnostic laboratories, pharmacy firms, and physicians. The industry also employs blockchain applications to identify mistakes in the traditional data storing system.
Smart contracts are programs stored on a blockchain that run when they satisfy certain predetermined conditions. It eliminates the middleman and adds levels of accountability for all parties involved, which is impossible with traditional contracts. Integrating smart contracts into conventional contracts saves time and money and ensures compliance from everyone involved.
The Ethereum blockchain is a popular smart contract platform preferred by most developers. Smart contracts are mostly associated with nonfungible tokens (NFTs). Still, any transaction done through a paper contract can be executed much more efficiently by a smart contract. Thanks to their broad scope, several blockchain-based contracts are becoming popular. It includes sectors such as government, healthcare, insurance, loans and mortgages, and real estate.
Blockchain and Internet of Things (IoT)
Internet of Things (IoT) is a network of interconnected devices that can interact and exchange data with other devices and systems over the internet. IoT helps smart home objects like kitchen appliances, cars, Alexa, or other voice command assistants connect to the internet. In short, IoT enables digital systems to record, monitor, and adjust each interaction between connected things.
However, one of the most significant drawbacks of IoT technology is security. With so much information and a single point that connects everything, they are easy prey for cyber-criminals. Enter blockchain technology, the vigilante that keeps a hawk eye on all IoT transactions. With security as one of the main features of blockchain technology, blockchain ensures that the data obtained by IoT devices are secure and only visible to trusted parties. Xage, a blockchain-enabled cybersecurity platform, uses real-life blockchain utilities to make things smarter and safer.
Copyright and royalties
With the advent of the internet, sharing media files is easier than ever. However, sharing of content can often deprive the original artist of credit and royalties. The issue is especially alarming in creative sectors such as music, films, and art. In an age where things go viral on the internet, blockchain technology ensures that copyright and credit are given wherever necessary. It also provides security and transparency in creative industries and keeps tabs on plagiarized content. Besides, blockchain technology is pro-artist and ensures that the creative owner gets a royalty when their products such as NFTs are resold.
Blockchain technology is an innovation that is still in the adoption stage. But as the world inches closer to the next iteration of the Internet—Web3—blockchain will become a powerful tool for democratizing data. The technology is barely a decade old, but it has already disrupted public governance, healthcare, and crypto, all for the better. With its full potential yet unrealized, it will be interesting to see what more real-world utilities the blockchain can bring forth.