And What Exactly Is Blockchain?
At this point, if you’re somewhat familiar with cryptocurrency, then chances are you’ve heard of blockchain. Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system thanks to what’s called a “hash”. Think of a hash as a digital fingerprint. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across an entire network of computer systems on the blockchain.
The technology offers a secure way for individuals to deal directly with each other, without an intermediary like a government, bank or other third party. Bitcoin and Ethereum are popular examples of blockchains. Everyone is allowed to connect to the blockchain and transact on them.
Currently, there are at least 1,000 blockchains with at least four types of blockchain networks. While the idea of blockchain is a singular data transfer type, there are multiple platforms provided in this industry.
Blockchain is what is known as a foundational technology. It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it could take decades for blockchain to seep into our economic and social infrastructure. Listed below are a few uses cases for blockchain:
Cross-Border Payments
Blockchain technology has the potential to provide a much faster and cheaper alternative to traditional cross-border payments methods. Indeed, while typical money remittance costs might be as high as 20% of the transfer amount, blockchain may allow for costs just a fraction of that, as well as guaranteed and real-time transaction processing speeds. There are hurdles to be passed, including regulation of cryptocurrencies in different parts of the world and security concerns. Nonetheless, this is one of the most promising and talked about areas of blockchain technology application.
Identity Management
One of the most problematic results of the internet age has been identity security. As diligent as many individuals and organizations are in maintaining their online identities and securing private information, there are always nefarious actors looking to steal and profit off of these digital items. Blockchain technology has already demonstrated the potential for transforming the way that online identity management takes place.
Supply Chain Uses
For many businesses across various industries, a key to success is a well-functioning, efficient supply chain. Blockchain technology has already been used in multiple industries as a means of keeping tabs on supply chains and ensuring their efficiency. This could eliminate human work and the potential for error from a complex and crucial process.
Real Estate
Real estate hasn’t escaped blockchain disruption either. Previously, transacting high value assets such as real estate exclusively through digital channels has never been the norm. Real estate transactions are often conducted offline involving face-to-face engagements with various entities. Blockchain, however, opened up ways to change this. The introduction of smart contracts in blockchain platforms now allows assets like real estate to be tokenized and be traded like cryptocurrencies like bitcoin and ether.
With blockchain technology, multiple people can buy tokens of a particular property and co-own the building. This is the tokenization of a property, allowing fractional or partial ownership of the asset.
Expect to see new integrations for blockchain in the forthcoming future.
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