How Blockchain is Used
When it comes to the case of Bitcoin, or in other words, exemplified by Bitcoin, blockchain Is used in order to store all of the data about the monetary transactions made there. Blockchain however is also a reliable way of storing data throughout other types of transactions as-well.
Many companies out there have incorporated blockchains, these include Siemens, Walmart, Pfizer, AIG, and many more. IBM even created its own Food Trust Blockchain that races the path that food products take in order to get to their eventual location, which is quite fascinating to think about.
Here are some of the ways that Blockchain technology is used today.
Banking and Finance
Banking is quite possibly one of the biggest industries out there that can benefit from a blockchain implementation.
Why you may be asking, well, think about it.
Financial firms out there typically only work throughout business hours, and normally do not work throughout the weekend.
This means that if you want to try and deposit a check on Friday night, you will probably have to wait until Monday morning to see that money get to your account and vise versa if you are trying to send a payment somewhere.
But let’s take a scenario instead where you want to make a transaction throughout business hours. In this case, the transaction can still take up to three days to verify due to the number of transactions that a bank has to settle.
Blockchain however works 24 hours a day, each and every day of the week. Yes, that includes weekends.
Through proper integration of blockchain within banks, customers can have their transactions processed in only a few minutes or even seconds. The way you can think about this is by thinking in terms of blocks.
They would need to wait the amount of time it took for the block to be added to the blockchain. This occurs regardless of weekends or even holidays, as the blockchain never stops.
Through this blockchain implementation, banks even have the opportunity to exchange funds between institutions much more quickly and much more efficiently.
Let’s look at the stock trading system as an example. Each settlement and even clearing process can take up to three days, or longer if you are trading on an international scale.
As such, the money and shares are seemingly frozen for that time period where the people are waiting for the transaction to be completed.
Now, take into consideration the amount of money that is being processed, and even these few days can carry significant costs and risks for the banks. Imagine what blockchain can do to make all of these risks and issues go away.
Now we will have a look at healthcare. The healthcare industry can use blockchain technology in order to efficiently and securely store the medical records of their patients.
When a medical record is generated and signed, it can be written within the blockchain and this provides the patients with proof and confidence that the record cannot be changed.
These personal health records can also be encoded and stored on the blockchain with a private key so that they are only accessible by certain people and ensure the maximum amount of privacy.
When it comes to a smart contract, it is a computer code that can be built into the blockchain and facilitate, verify or negotiate a contract agreement.
These smart contracts operate under a set of conditions that the users agree upon.
When these conditions are completed, the terms of the agreement are carried out.
Now, this is an obvious one, but the blockchain is essentially the bedrock for Bitcoin, which is a cryptocurrency. The U.S. dollar is controlled by the Federal Reserve.
Under this authority system, a user’s data and currency are technically controlled by their government. If a user’s bank account, for example, is hacked, their private information is at risk.
If the bank collapses or is located within a country where the government is not that stable, to begin with, the value of the currency can also be at risk.
Now let’s take a look back at Bitcoin. You see, by having its operation being spread across many computers in a network, the blockchain ensures that Bitcoin and other cryptocurrencies that work through the blockchain operate without the need to have a central authority present at all times, or at all.
Using cryptocurrency wallets in essence allows people who do not have state identification to also store money.
When it comes to property handling in the real world, a physical deed has to be delivered to a government employee at the local recording office where it is manually entered into the central database and public index.
Obviously, this process is extremely time-consuming, costs a lot, and has to have multiple people involved in order for it to get completed.
It can also be exposed to human error, where inaccuracy can potentially make tracking property ownership a lot less efficient.
As such, blockchain has the potential to truly eliminate each need to scan documents and track down physical files in a local recording office.
If the ownership is stored and verified on the blockchain, the owners can trust that their deed is accurate as well as permanently and securely stored.
Blockchain can also be used to facilitate voting systems. Voting with blockchain has the potential to remove election fraud altogether and boost voter turnout.
The blockchain protocol can also maintain transparency in the electoral process and reduce the personnel required to conduct an election. This provides officials with instantaneous results.
Finally, let’s talk about the pros and cons of Blockchain.