How Blockchain Technology is Being Used Outside of Cryptocurrency
Just think of a place where you can store all your personal information safely, and you’re the only one who can decide who has access to it. You also have the freedom to decide what information you want to share and have the option to revoke any access.
If indeed this kind of place becomes a reality, I’m willing to bet that it’s going to be built in a blockchain technology. Click Here To Go Straight To Our Online Tutorial
The blockchain technology is still in its development stage. However, those that are already aware of it are convinced that it’s going to change several industries and markets. Thus, after delving into the mechanisms of cryptocurrency and blockchain, it’s about time to have a closer look at what the blockchain technology is capable of doing outside the realm of cryptocurrency. Most of these possibilities come in the form of smart contracts.
What is a Smart Contract?
“Smart contracts” was a term created by Nick Szabo even before the blockchain technology was developed. Szabo envisioned a type of technology that was meant to replace the legal contracts, where the terms stated on the contract can be automated and digitized. The action, which refers to the “payment,” is going to be completed right after the condition has been met. In this case, the condition refers to the “delivery.”
After the blockchain was introduced, the term “smart contract” was used widely as a kind of software that operates computations within the blockchain. As a quick reminder, blockchain refers to the distributed, cryptographically-secured ledger and each new block come with reference to the prior block, including confirmed tractions since the previous block has been approved.
I would use the term “transactions” lightly because it would seem to imply that we’re still talking about cryptocurrency, which is not really the case. We will refer to them as transactions due to the protocols that are in place to determine if a contract has been considered fulfilled.
These days, a smart contract can refer to any kind of software for as long as it’s based upon the technology of blockchain. The smart contract can be used not only for completing the “transactions” but to also secure data. A smart contract may specify that your doctor can have access to your medical records and history, yet he or she won’t be able to have access to your financial history.
Early Blockchain Technology Developers
Although using blockchain technology for some other applications is still in its infancy stage, we’re already seeing a lot of promising developments in this field. For instance, the Ethereum project has advertised itself as a decentralized platform that makes it possible for smart contracts and applications to run exactly as programmed and without any possible downtime, fraud, censorship, or third-party interferences. There’s a list of 850 apps at stateofthedapps.com that have been built in the Ethereum platform.
One of the most popular of these apps is Augur which uses the knowledge of the masses to predict upcoming events.
IBM is currently involved in doing tryouts with some major companies such as Maersk for the Hyperledger Fabric. This is a blockchain framework which provides a foundation for developing solutions or applications in a modular architecture. It was designed by Digital Asset and IBM as a technology that can host smart contracts known as the “chain code” and comprises of the application logic of the system.
The potential future applications of such technology are endless, starting from the implementation of a blockchain ledger that could streamline operations and approvals, and even moving elections online and guaranteeing secure votes since it will require an unreasonable amount of computer power before it can be hacked. Nevertheless, as with any new technology, this one comes with either opportunities or potential for corruption.
Positive Application of Smart Contracts
Below are some examples of how companies would be able to benefit from the use of smart contracts. With the use of blockchain technology, they would be able to:
Come up with a supply chain management system that’s fully automated. If a certain condition has been reached, appropriate action will be taken. Just imagine a factory which orders supplies automatically as soon as they run out.
Manage huge paper trails. Each and every step of the paper trails will be included within the chain as a new block and checks can also be included to make sure that all conditions have been met to proceed.
Exchange important business information in real time. Each and every node could contribute to and get access to all the information within the blocks.
Remove the middleman when it comes to negotiating with others. The parties can securely and directly interact thanks to the blockchain technology.
Prevent fraud. The technology’s irreversibility makes it safe. In a proper setting, it won’t be possible to make any unauthorized changes to blocks that are already approved.
Potential Pitfalls of Smart Contracts
Below are some of the reasons why some companies wouldn’t be willing to use the blockchain technology on certain parts of their business:
The contracts’ content is visible to everyone. There may be certain parts of your business that you don’t want the public to know. In this case, there may be a need to add encryptions on certain data.
It’s not possible to correct errors. If you make a mistake, you’ll need to reverse the contract.
It requires long implementation and development to replace any existing solutions on a large scale. This could improve once you become more versed in using the technology.
If there’s a need to store personally identifiable information, this could break international and local regulations. For instance, smart contracts will have difficulty complying with privacy laws such as the GDPR.
The fully distributed network also provides a big opportunity for hackers. Keep in mind that all notes will have access to all information. Thus, it could pose added risks once a hacker gets access to a node or if he or she pretends to be one.
Development of the blockchain technology is expected to trigger a revolution that may be similar to what the Internet brought us. It could take some time for smart contracts to conquer the corporate world fully. However, the ball has started rolling. If you want to prepare your business for the future, especially if you belong to an industry where value transactions are taking place, then it’s a good idea that you start learning more about smart contracts and blockchain technology.
8 Areas That Use Blockchain Technology outside Crypto
The blockchain technology is an engine that runs cryptocurrency. However, its benefits and applications go beyond tokens, Bitcoin, and Ethereum. Furthermore, it has a massive potential to improve the way things work in various applications greatly.
Below are eight areas that can use blockchain beyond its usual use in the cryptocurrency market:
Because blockchain works like a transparent virtual ledger that keeps things in order, the technology can also be useful in the field of accounting. Blockchain minimizes the risk of human errors, which is very costly in the field of accounting.
With the blockchain technology, accounting records remain transparent, neat and easy to trace. The technology has also made things more efficient because it’s now possible for companies to keep a joint register.
It’s also possible to apply the blockchain technology in counting votes during government elections. In fact, Moscow has already tested the technology’s effectiveness in their local elections. When it comes to voting, it all comes down to transparency and integrity, which the blockchain technology would be able to deliver. Consequently, cases of results manipulation and fraud can be greatly minimized.
It’s also been said that NASDAQ has been using blockchain technology in their shareholder voting. This has led to positive results, and NASDAQ has referred to it as something innovative, necessary, and practical.
Blockchain technology is now being used to track consumption of renewable energy too. Energy companies such as the Exergy in Brooklyn and Powerpeers in the Netherlands have been doing this for quite some time now. In line with this, the Global Blockchain Technologies has recently purchased Coinstream Mining Corp, which gives authority to the Global Blockchain to manage their assets.
The ventures of the Global Blockchain aren’t limited to energy supply only. They have also invested in various companies such as Millennial Esports and Breaking Data Corp.
Peer-to-Peer Global Payments
The blockchain is also used as a payment platform in the same way that PayPal is. The technology promises a secure, fast, and cheap transfer of funds. Thanks to its vaunted security, a lot of consumers are now turning to blockchain when moving funds to various places all over the world. Since it acts like a decentralized digital ledger, non-believers could eventually become its fans soon.
As stated, the blockchain technology is transparent and secure which can work well with the various quality assurance processes of numerous companies in different sectors. Due to its traceable nature, blockchain is now also used in the food industry to identify key areas such as batch information, origination, and some other food safety details.
Tacking the Refugee Crisis
This year, UNWFP has sent more than 10,000 Syrian refugee vouchers that are cryptocurrency based. Organized by Gavin Wood, the co-founder of Ethereum along with Datarella, the platform was put into action to help thousands of refugees use cryptocurrency to buy food.
According to the UN High Commissioner, the Syrian crisis has become one of the biggest humanitarian emergencies in the world. The refugee crisis continues to grow, and agencies have to look for new solutions.
The international uncertainty and opportunity to bypass bureaucracy using the Ethereum technology will not only give the refugees direct access to the donated funds, but it can also be a huge first step in solving the growing international refugee crisis.
Creating Financial Avenues
The blockchain platform that was used to provide financial vouchers to Syrian refugees is also being considered to bridge the poverty gap all over the world. From what we have seen, the technology could work as a bank for people who don’t have bank accounts.
As long as you have access to a smartphone, then you should be able to access your funds conveniently. Also, blockchain works as a decentralized system. This means that you will not be charged each time you make a transfer, unlike a typical banking institution.
In the previous year, the cost to send money to Sub-Saharan Africa reached more than $30 billion, and as stated by the Bureau of Economic Analysis, the annual remittances coming from international financial transfers from the US had reached $50 billion.
BitPesa, a technology that collects and sends crypto-payments from Africa and the rest of the world, is a good example of the positive effects that the blockchain technology has. This platform is truly promising since it’s currently very expensive to send money to Africa.
About this, the blockchain technology could tackle two huge variables of global poverty – first, it has made sending money cheaper for immigrants, migrants, and refugees who need to send money to their families. Second, it has made doing business with countries that are hard to reach easier and more convenient. These benefits alone have the potential to tackle extreme poverty.
Improving Government Efficiency
The blockchain technology can accelerate government capabilities and could affect certain functions in government like education, healthcare, and public benefits.
For instance, government processes are sometimes slow and difficult to understand. Above all, they are highly susceptible to corruption. As a solution, Blockchain can help the government to make the process more secure and efficient.
Blockchain as both an industry and a technology are still largely undefined. We’re still in the exploration phase of this technology and far from any proven and established solutions. Yet, it’s truly a promising and relevant solution that aims to address some of the most vulnerable areas of the human rights – financial inequality, corruption, and access to information.
By setting an international precedent and hopefully a standard for transparency, the blockchain technology is without a doubt helping to close the economic gap while working on the preservation of human rights.