Blockchain platform is an open-source ledger system that tracks transactions. Transactions could include NFTs, cryptocurrencies, voting records or other information.
These transactions are then collected into blocks, which other users can validate by resolving mathematical issues. After a block is validated, it cannot be changed or added to a chain of blocks that have already been permanently verified.
Let's suppose that the air fryer that you bought last year wasn't as good as you thought it would be. To sell your item, you could turn to an online seller such as eBay. These sellers are the marketplace that connects you (the seller) to potential buyers. They make money by charging fees.
In this instance, let's imagine the buyer is from Germany. The platform confirms with both your bank and the buyer's bank that you have made a purchase on eBay. Additionally, it verifies that the buyer bought your air fryer and that it is still on the market. You can sell an air fryer using blockchain technology. This will make it unnecessary to use middlemen and guarantee a quick, secure, and secure transaction-even while doing so globally.
Blockchain: The History
Before we get into the details of how blockchain companies make it possible, let's look at the history of blockchain. Satoshi Nakamoto, the mysterious founder of bitcoin, introduced electronic payments to the world in 2008.
His cryptocurrency was the first global blockchain. It was easy to modify bitcoin's code because it is open source. Anyone can see, reuse and adopt it.
Blockchain users tried to create better bitcoin versions early on. Litecoin, a cryptocurrency alternative developed by a former employee of Google, aims to speed up transactions. Others, such as the meme-inspired Dogecoin, were made for people who are turned off by bitcoin's high price.
Namecoin makes it very difficult for outside players like the government to take over websites. Namecoin makes it nearly impossible for anyone to modify bit domains that are registered on a blockchain space.
Companies and individuals are currently exploring public blockchain technology for healthcare, energy and supply chain management. More information will follow.
Blockchain Technology Has Many Benefits
Blockchain Security
Blockchain's ultra-secure network is one of its greatest benefits. Blockchain is much more secure than standard username-password security systems because it inherently encrypts data. private Blockchain's community of users offers the greatest security benefits.
Because there is no single point of failure, decentralized data stored on blockchain makes it very difficult to hack into. What does this all mean? Let's suppose you have all your documents backed up on one hard drive.
If the hard drive is lost, stolen, or destroyed, all of your documents will be permanently lost. However, it is improbable that your data would ever be lost if all of your documents were preserved on tens of thousands of hard drives. The strength of blockchain security resides in this.
Hackers would have to overthrow 50% of a blockchain network to gain access. This is more time than it takes for a block to be created. This is a huge task that requires a lot of computing power in most blockchain networks.
Larger networks are more difficult to hack since they are more dispersed and contain more computers to validate transactions.
Hacks are possible, but they are not impossible. Data from 2017 shows that hackers have stolen around $2 billion in cryptocurrency due to vulnerabilities in the system. Hacks can occur, in addition to the 51% rule.
Thanks to hash functions, it is easy to identify when a block was altered. The data from the next block is added to the hash of the previous block. Any attempt to modify a block will result in the hash being changed completely. This will set off a red flag and disable the block.
Blockchain provides privacy. Blockchain does not offer privacy. Systems check transactions using a variety of data, including names, addresses, and card numbers. All of this private data may be taken. In a blockchain, only the private key is important.
Each blockchain user has to have both a private and public key. A mathematical formula is used to calculate their public key from their private key. To build their public address for transactions, this information is then coupled with other information.
It is impossible to verify transactions sent to the public address without the private key. This private key is never shared with anyone outside, which means that multiple complicated formulas are required to verify the public address and private key of a user.
It's possible to reverse this formula and reveal someone's private key using their public key. It is possible, but it is not likely. However, the good news is that there are very few chances.
Private key numbers are between 1 and 2256. This means that hackers must find the right number between 1 & quattuorvigintillion. A 78-digit number that is larger than the number of universe atoms.
Smart Contracts and Decentralization
Decentralization and smart contracts are the second benefits of blockchain projects. Smart contracts are currently the strongest application of blockchain.
Smart contracts allow for the creation of digital trustless contracts that can be used in all types of applications. This is something that was never possible before without any third party.
Imagine creating digital contracts with contractors and being able to automatically pay them when the work is completed to a satisfactory standard. This is just one example of smart contracts' many benefits.
Smart contracts are basically blockchain-based and automate payments and transfers according to a set of predetermined conditions. Smart contracts allow you to automatically pay your electric bill when your electricity consumption reaches a certain level.
The transaction would be securely sent to the power company, and it would be verified with blockchain initiative. You would never need to worry about scheduling payments again, and there would be no late fees or stolen financial information.
As smart contracts automate more transactions, the need to have middlemen or outside agencies will decrease. It's very difficult for any one person to take control of information that is distributed throughout the network.
Individuals and governments in power will not be able to stop information from being accessed because it will be available on multiple computers throughout the network.
Speed and efficiency
Third, blockchain service is efficient and fast. Manual data entry can be tedious, and easy to make mistakes. Just think about it. What number of types are you most likely to make when writing an email? Many organizations have multiple record systems that are used for different tasks.
An ice cream shop might use one record to track how much ice cream they buy and what supplies they use, another record to track how many hours employees work, and another record to track sales.
It takes a lot of time to review each record. All this information is stored on the blockchain and can be verified once it's generated.
The rapidity of blockchain verification offers several advantages. For instance, validating a simple stock transaction using current methods can take up to a week. Numerous organizations, forms, and acronyms are used during the process.
Blockchain eliminates the need for third-party verification. All the information required to verify and complete the transaction is included in the ledger. Stock transfers can now be made almost immediately instead of waiting for a week. Talk about serious returns!
Blockchain Technology is Used By 81 of the 100 Largest Institutions
Below is a list of categories for adoption stages:
Research
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Understanding how blockchain can affect their business is key. Before any actual development can begin, this includes selecting the right blockchain/DLT infrastructure and finding potential partners.
Pilot
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The blockchain solution was tested in a preliminary test to determine if it would work for their business. This test is for a limited number of professionals and will not be extended to more serious, long-term developments.
In development
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We are currently working on a near-production-ready service. After successful pilots and beta testing, this phase is now complete.
In production
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They already have a real product or service that their users, clients, or business partners are utilizing.
Inactive
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Blockchain technology was initially an interest, but it is not active or has never been started.
51 of the 81 companies currently using blockchain technology are at the pilot stage. They are either in development or fully operational.
It is hard to determine whether these companies will continue after the pilot phase, as a lot of information is confidential. This is a strong indicator of blockchain maturity, as it must bring tangible business value that can be transferred into production.
27 out of the 100 largest companies will have a live, fully functioning service that is using blockchain technology by 2023.
Public Companies Use Top Blockchain Cases
These are the main use cases being developed currently by the 100 largest public chain companies:
Blockchain infrastructure services/BAAS platforms
These companies create infrastructure to help other companies develop blockchain solutions. These companies aim to provide either coding support or hosting.
Supply Chain / Traceability/ Provenance
Companies are seeking to modernize supply chains using blockchain because of the complexity of supply chains. This is done by using blockchain to be a trusted single source of truth that allows companies better track their products and verify their identities.
Clearing and settlements
Transactions of financial assets such as bonds, equity, or other instruments in capital markets require many parties to complete and settle the transactions. Blockchain can lower the cost of settlement, allowing transactions to be completed faster.
Read More: How Blockchain Technology Works and Is Changing the World!
It's more than Crypto...
There is too much talk about bitcoin prices, trading volumes and when Bitcoin will reach $100,000. This is not the reality.
It is clear that blockchain adoption has begun among enterprises. This is despite the fact that many people have been watching from the sidelines. Although the technology has been widely praised and deplored in the public eye over the years, it is becoming increasingly clear that it is the only technology that has been stable and consistent through these volatile market cycles.
It is remarkable that 81 top institutions have been actively working on blockchain solutions in the past decade.
Many of these companies use blockchain to create their own private solutions or to collaborate on large-scale innovation and collaborations. It speaks volumes about the future potential of blockchain technology that most of the top 100 companies are using it. The traditional players realize that they must improve their legacy systems, or they will be left behind by their competitors and newcomers to the market. Many of them are realizing that falling behind is a must-have scenario.
The blockchain industry will see many production-ready solutions as well as development solutions.
Read More: 5 Ways That Blockchain Technology Is Changing the Business World
Blockchain Applications
OK, we've covered blockchain and how it works. But is anyone actually using it? It's not just about making Bitcoin rich. It's a passionate yes.
Bitcoin is a small application that uses blockchain technology. There are many other decentralized applications. Let's take a closer look at some other uses of blockchain.
Payments and cryptocurrencies
Let's get this out of your way: cryptocurrencies are one of the most widely used blockchain applications. we know. We promised I would talk about other blockchain applications. Although we swear we will, it is impossible to discuss the blockchain ecosystem without first looking at bitcoin.
According to market capitalization, Bitcoin is the most valuable cryptocurrency, in part because it was the first and partly because it has the biggest user base.
Bitcoin has grown to be so popular that many restaurants, bars, and shops accept it as payment. Even though bitcoin is a practical way to pay for your daily life in larger cities, such as New York City, it's not always the best.
Bitcoins are traded on an open market, so investors such as the Winklevoss Twins could place bets on future price movements. Don't forget to consider the fact that bitcoin is notorious for huge price swings.
Additionally usable for payments and market speculation are the cryptocurrencies Ripple, Litecoin, and Ethereum. These cryptocurrencies do have certain peculiarities to enhanced its value in the market.
Litecoin can also be used for payments, but it is more focused on everyday items than cross-border purchases. Charlie Lee, the founder of Litecoin, stated that it is more focused on payments, faster transactions and lower fees.
There's Ethereum, and Ether, its cryptocurrency. Smart contracts are built into Ethereum's code and allow for many deals to be made automatically once the terms have been met. This is an important step in the use of blockchain technology in industries other than FinTech.
Trade
These cryptocurrencies, and more importantly, the blockchain that underlies them, will have a huge impact on trade. International and domestic trade will be easier than ever thanks to faster verification, a reduction or elimination of exchange fees and the elimination of errors.
IBM was able to free $100 million that had been held up in disputes by implementing blockchain in their internal finance unit. Think of how much blockchain could be used to facilitate trillions of transactions every day in the U.S. financial sector.
Crowdfunding
Blockchain will make a huge impact on the way startups and businesses raise capital beyond the insurance and international trade sectors. Sites such as Kickstarter, which was founded in 2009, have revolutionized fundraising by making it possible for anyone to access financial support from a wide audience rather than traditional sources like banks or venture capital funds.
A built-in insurance policy is available since only projects that reach their funding goal are eligible for payment. A 5% fee is charged by Kickstarter for this service, as well as for connecting entrepreneurs with potential funders. Kickstarter has raised more than $6.5 billion for different projects as of 2022.
These fees can be eliminated with blockchain because a network allows immediate verification, and smart contract transactions allow transactions to occur only after a project has been fully funded. Blockchain crowdfunding is being explored by some startups and artists in the form ICOs, or initial coin offerings.
Virtual coins work in the same way that bitcoin. Investors can purchase them like stock shares to invest in businesses offering them. However, unlike the stock market, ICOs are not a way to purchase ownership rights.
Property and Identity
The most crucial thing is to protect your identity and property records. You are entitled to numerous things, such as citizenship, the ability to vote, and the right to employment. This information is crucial.
Many countries still have paper records for personal and government records. It is impossible to determine who owned what. This has led to corruption and more loss. Blockchain will bring stability to uncertain times in the future.
Blockchain is a digital failsafe for important documents and an identity management system that is extremely secure. Consider how often you upload financial or personal information to the internet. When was it two hours ago that you purchased those boots on your lunch break? No judgment; I'm only looking out for your financial security.
You must be able to reliably authenticate your identification for online transactions. However, the information you provide could be hacked. Due to the distinct user addresses and decentralize(d ledger of Blockchain, hackers cannot access your critical information.
Supply Chain
Thanks to smart contracts, a lot of merchants are now adopting blockchain to streamline their supply chain procedures. Early in 2017, Maersk, the largest container shipping firm in the world, partnered with IBM to create a digital, blockchain-based supply chain management system. It was developed to reduce costs and increase efficiency in global trade.
According to IBM, the expenses of processing and managing trade documents are "calculated at one-fifth of the actual physical shipping costs." Thousands of goods can be transported by one ship. Documentation may also be lost, delayed, or misplaced in addition to the cost of transporting it. This can result in more difficulties. A logistical nightmare, this.
Blockchain allows all parties to the supply chain to view and access documents in real time. Because no one can alter the blockchain without the permission of others, all supply chain information is secure and accurate. Transparency helps to reduce shipping time, fraud, and errors and ensures consumers get the goods they want from all over the globe.
Healthcare
Healthcare is complicated. It is so confusing and complicated that I find myself often skipping visits to the doctor because of the overwhelming amount of paperwork and stress involved. Do not look at the screen that way - I'm sure you've done it.
Blockchain technology has the potential to either solve all of these problems or improve them. Doctors, patients, insurers, and physicians can all access and update their medical records swiftly and securely thanks to blockchain technology. Doctors may use this data access to spot early symptoms of disease or declining health.
Additionally, Medicare fraud might be decreased with the aid of the blockchain. This issue has been expensive. According to the Department of Justice, over 100 medical professionals will be prosecuted for participating in healthcare fraud schemes that cost $1.4 billion in losses.
Blockchain makes it possible for patients to be paid based on their outcomes and not predetermined rates. RoboMed Network and other healthcare players are using blockchain to make this possible for thousands of patients.
Energie
It is impossible to determine if the energy entered an electric grid from a fossil fuel or nuclear plant. Power plants employ a complicated, costly system to track the amount of renewable energy.
Many of these barriers can be removed by reducing the number of intermediaries and errors as well as building a decentralized record of sources of renewable energy using blockchain. But it doesn't stop there.
A distributed grid has been growing in size over the past few years. This grid is made up of solar panels placed on roofs and electric car batteries. These systems can produce more power than they require, and their owners can sell excess power to the power company. However, it may take several months before you see the returns.
Conclusion
It was quite a bit. It's OK if you don't fully understand blockchain technology or aren't ready to incorporate it into your business strategy. Blockchain will not become common place without the support of many industries and years. While we do not recommend that SMBs be concerned about blockchain yet, it is important to monitor the new tech as more enterprise companies develop blockchain applications.
