It is believed by the people worldwide that when it comes to storing information, computers have been sort of unreliable, unless you have secured your machine by keeping it in an isolated place with no internet connection and no human is able to access the machine. Otherwise, intruders will find some or the other ways to penetrate your systems and access your data or maybe damage it. For a long time, this problem remained unsolved and people started looking to develop means to combat the system predators who could prove to be potential threats to their business. They could come up with some security measures but they remained vulnerable due to ceaseless developments in the hacking strategies. Fortunately, with the advent of a new technology, the organizations have started to feel that there is something that can protect their business. This emerging technology is named as Blockchain, which is very simple, transparent and cannot be penetrated.
Blockchain is the impending future our computer networks. This system in very cost efficient where each person the judge and the protector of his/her as well as other’s information. Blockchain ensures that the data is not lost, stolen or manipulated due to that fact that each person is responsible for that data who is monitoring as well as maintaining the accurate records of what all has ever happened within the system. Also, the process is entirely secured with cryptography. In this article, we are going to have a look at the blockchain technology, its benefits, application areas and the future scope.
What is Blockchain?
Blockchain refers to the the chain of blocks, where blocks refers to the list of records or the digital information linked using cryptography. Here, the individual block contains a cryptographic hash of the previous block along with the timestamp and transaction data. Blockchain is also called an open distributed ledger that is capable of recording the transactions efficiently between the two parties in an authenticable and perpetual way. In 2008, Satoshi Nakamoto invented blockchain so as to serve as the public transaction ledger for Bitcoin which the the most trending cryptocurrency at present. With the advent of Blockchain, Bitcoin became the first digital currency that solved the problem of double spending without any requirement of a central server or any trusted authority. Blockchain is an important element of cryptocurrencies, and the digital currencies like Bitcoin have no existence without the Blockchain technology.
Although Blockchain was originally developed to serve Bitcoin, however in the past 10 years it has developed to a greater extent than expected, and multiple industries like energy, healthcare and shipping have started implementing this technology. The reason behind its widespread popularity and growth is its immutability. Any new information can be added to the ledger by any person, but any previous transactions or any sort of information stored earlier cannot be edited, modified or adjusted because of the linkage of blocks using the cryptography technique. This technology is predominantly used in financial industry at present. The organizations like Deutsche Bank, US Federal Reserve, Barclays Bank, Citigroup and NASDAQ have already deployed blockchain technology.
Benefits of Blockchain Technology
1. Higher transparency
Blockchain has helped a lot in making the transaction histories more transparent. Blockchain being a sort of distributed ledger shares the same documentation with all the users in the network. The users can see the information and that information is only updated on mutual consent, which means that when everyone agrees to it, or is rather on the same view in regards to that information. If you wish to make a slight amendment in the transaction record, you will need to make modify all other records subsequently. Therefore the transparency, consistency and accuracy will be more as compared that the data pushed through pushed through paper-heavy processes. Moreover, the data will be available to all the users in the network who have been authorized to access the information.
2. Improved security
An important advantage of blockchain technology is its security. Blockchain is a lot secured as compared to any other systems that keeps and maintains records. In blockchain, once the network participants mutually agree upon the transaction, then only it is recorded. After the transaction is approved, the same is encrypted and linked with a previous transaction. Also, the information is stored across a network of computers rather than a single server. These couple of things make it very difficult for the intruders to penetrate the system and access, edit, adjust or modify the transaction data. By preventing unauthorized access and fraudulent activities, blockchain has proved to be very critical in the sectors like government, financial services, healthcare etc where protection of sensitive data is absolutely very crucial.
3. Enhanced tracking
Most often, companies dealing with the products that are traded via complex supply chain face a great difficulty in tracking an item back to its origin. Blockchain helps in recording the exchange of goods thereby making an audit trail that shows from where the product came along with each halt that it made on its journey. Because of this historical transaction data, the authenticity of the product and prevention from frauds is done very easily.
4. Improved speed and efficiency
The conventional process that involves heavy paper work makes trading a very slow and time consuming process, The process also has a high possibility of human errors and it often needs mediation by third-party. Blockchain helps in making the process streamlined and automated, thereby making the transactions fast and efficient. Using blockchain, all the records are written in a single digital ledger so that you do not have to reconcile multiple ledgers and eventually you have less clutter. Moreover, these records are shared with all other participants in the network, which means that the participants can have access to the same information. This enables them to trust each other without the need for numerous intermediaries.
5. Cost reduction
The primary focus of most of the industries is cost reduction. Blockchain helps in significant reduction of costs because with Blockchain, you do not require any third parties or mediators for making any guarantees because it hardly matters in Blockchain that you have a trust on your trading partner. All you need to do is trust the data in Blockchain. Moreover, you do not need to review the entire documentation again in order to complete the trade because the participants in the network will also have access to the single, immutable version of the documentation.
Application of Blockchain
Because of its benefits, Blockchain has become the preferred choice of enterprises across the globe. The ability of blockchain to streamline and automate the workings of organizations is the reason behind its tremendous uplift among all the business domains worldwide. Let us look at some the sectors where this technology is used currently.
1. Financial Services
Blockchain was first used by the financial industry for the cryptocurrency transactions. Blockchain is used by Bitcoin as its underlying technology. Also, 11 banks of the R3 consortium got connected already on the centralized Ethereum-based blockchain network. The government of Estonia has used blockchain-based technology, which is the keyless signature infrastructure for authenticating data in their databases since 2013. So, it is clear that Blockchain is capable enough to increase secure data exchange in other sectors and make that data transfer simpler and easier between entities.
2. Healthcare
Blockchain is very useful in the healthcare industry. By using the digital signatures on blockchain-based data, availability of Health records can be regulated and their privacy can be maintained. This is due to the fact that these digital signatures allows access to the records only when authorized by multiple people. Also, the community of people which includes patients, doctors, hospitals and insurance companies could be a part of the overall blockchain which eventually reduces any frauds in healthcare payments.
3. Defense
Defense is an integral part of the country that is responsible for national security. The data of the defense system of a country is very confidential and needs serious protection from any unauthorized access, because any intrusion or data modification could lead to national threat. The defense infrastructure as well as the computer systems of most of the countries are distributed across different locations. The defense systems are made secure from any attacks on important network and hardware equipment with the help of Blockchain technology distributed across multiple data centers. This is because of the consensus-based access for modification.
4. Government
There is often a delay in the exchange of information between the government departments that work in silos, which negatively affects the citizen services. By using blockchain technology the data between the departments is linked so that it is released in real time after the consent of citizen and departments to share the data. Blockchain not only helps in improving the transparency, but also in checking the corruption in governments across the world.
5. Law
Contractual transactions are very time consuming and can even affect the performance of a business. With the help of "smart contracts" in blockchain technology, the agreements are signed, validated and enforced automatically. This eliminates the requirement of any mediator like a legal firm, because any payments will be made on the basis of achieved targets. So, this makes saves a lot of time and money of the organization.
6. Energy
In the business of power generation, microgeneration of electricity is becoming a huge trend. Power supply gaps have been filled up to a large extent around the world, thanks to the new energy initiatives like community solar power and home power generation. Microgeneration supports creation of energy market as it adds to traditional power suppliers. By using smart meters, the amount of electricity produced and consumed can be registered in a blockchain, so that different locations are able to consume the surplus energy, and thus the original producer is able to get credits or currency. These credits can later be redeemed against the grid when the microgenerator requires extra electricity from the grid. These contracts are enforced by blockchain in real time or near-real time, which allows the creation of a utility market with minimal red tape.
Future of Blockchain
With above discussed wide range of possibilities, it seems quite obvious that blockchain is potentially capable of enhancing the quality of delivery of services by improving data integrity and confidentiality. With its ability to provide transparent and secured transactions, blockchain is certainly going to be a most strongest pillar of the digital world in the near future. Blockchain has a very glittering future ahead. As the report published by Wintergreen Research, the global blockchain is expected to increase to $60 billion by 2024. Therefore Blockchain has an extensive use in major sectors around the world and it is considered to cover a vast share in the market.