Applications of Blockchain Technology
The following are some of the top applications of blockchain technology:
- Money transfers
- Digital voting
- Insurance
- Transparent budgeting
- Smart appliances
- Loan lending
- Real estate
- Non-fungible tokens (NFTs)
- Media (artist rights)
These applications demonstrate the potential of blockchain technology beyond just cryptocurrency. With its decentralized and distributed nature, blockchain has the capacity to revolutionize various industries and create new opportunities for people around the world.
Exploring the Applications of Blockchain Technology
Blockchain technology is often associated with Bitcoin, but it actually dates back to the 1990s. In 2008, the Bitcoin whitepaper was published and blockchain technology gained widespread attention. Many developers believe that blockchain is only useful for Cryptocurrency, but it has a much wider range of applications. In this article, we’ll explore the various applications of blockchain technology. Let’s dive in.
Understanding Blockchain Technology
Blockchain technology is a digital ledger that is decentralized, distributed, and immutable. It is primarily used to store transaction details. A ledger is a record book of an organization’s transactions.
Understanding Why Blockchain is Decentralized and Distributed
Blockchain is called decentralized because it operates on a network with no central authority. Instead, it is run by every node in the system, with everyone having the same authority. In contrast, centralized networks, such as the Indian Government and RBI, are controlled by a central authority.
Decentralized networks are gaining popularity as they eliminate the issues caused by centralization. For example, during the Indian Government’s demonetization announcement, people who disagreed with the decision had no way of rejecting it since it was a central authority decision.
In addition to being decentralized, blockchain is also a distributed system. The blockchain network spans the entire globe, with nodes located on different computers. Every node in the blockchain network holds a copy of the blockchain.
Blockchain Structure
Blockchain is a chain of blocks connected to one another through hashing algorithms like SHA 256. Each block stores data related to transactions, its timestamp, and a unique hash value generated using the inputs. The hash function input comprises data inside the current block, its creation time, and the previous block’s hash value. The first block is the Genesis block, which contains dummy data and lacks a previous hash value, marking blockchain’s start.
[Structure of Blockchain]
As every block contains a previous block’s hash, the blocks get linked, forming a chain. Now, let’s move towards blockchain applications.
Top Blockchain Applications
Here are some of the most noteworthy applications of blockchain technology:
– Cryptocurrency payments and transactions
– Supply chain management
– Identity verification and management
– Voting systems
– Decentralized marketplaces
– Digital asset management
– Smart contracts and legal agreements
– Data sharing and storage
Secure and Fast Money Transfers through Blockchain
Money transfers are becoming a common practice nowadays. To ensure faster and more secure transfers, blockchain can be utilized. By using a blockchain-based money transfer application, transactions can be executed with improved security features compared to traditional options. Cross-border financial transfers are also more efficient and cost-effective on a blockchain platform, such as Ripple. Ripple offers instant and secure cross-border transfers to financial institutions, with the use of blockchain technology.
Digital Voting: A Secure Solution with Blockchain Technology
Tampering and double voting during the polling process lead to a lack of trust in democratic countries worldwide. To ensure that voting remains secure and tamper-proof, blockchain technology can be used. With blockchain’s immutable property, votes can be stored in unique blocks that cannot be altered. Moreover, a double-spending problem can’t arise because each block has a different hash value. Hence, each person’s vote remains safe and secure. FollowMyVote, a blockchain startup, has an online voting system where every authorized voter gets a token that can be used to vote only once.
Insurance Sector and Blockchain
The insurance sector is vulnerable to fraud like repetitive claiming and tampering with policy papers. The use of blockchain and smart contracts can establish a secure and trustworthy system. Blockchain ensures that only one claim is made for a single accident. Smart contracts automate the claiming procedure without any middlemen. During an accident, the accident details will be given to the blockchain for automatic claiming and stored securely. An instance of such a network is openIDL, developed by IBM blockchain, working with the American Association of Insurance Services.
Transparent Budgeting:
Every year, the financial budget is announced in our country as well as in all other countries worldwide. However, a report by Corruption Perceptions indicates that two-thirds of the countries are highly corrupted. Thus, although the budget is presented to us, we never truly know if the money is being spent wisely in the specified areas. A transparent budget system would help track all government transactions and assure citizens that their money is being spent properly. While not all information can be made public, the majority should be made available to the public. Implementing transparent budgeting will increase citizens’ trust in their governments and prevent unnecessary wastage.
Smart Appliances and Blockchain
Blockchain can be utilized in the Internet of Things (IoT) to store data gathered by smart devices. This data can be stored immutably and be secure from cyber attacks. Patently Walmart is a blockchain-like technology that provides unique identification and passwords for smart devices.
Loan Lending Process on the Blockchain
The traditional loan-taking and lending process involves extensive documentation, making it long and expensive. However, blockchain technology can streamline the process. Through smart contracts triggered by specific conditions, loan-lending procedures can be automated, eliminating costly middlemen like bank agents. As a result, the process becomes cost-effective and efficient.
Real Estate: Double Spending Problem and Blockchain Solution
In the real estate industry, double spending is a common problem where a property is sent to multiple buyers simultaneously. This leads to fraudulent activities, leaving buyers with legal ownership disputes. To prevent this, blockchain technology can be implemented. With blockchain, each real estate transaction can be added to a block, ensuring that the property cannot be sold to multiple parties.
Non-Fungible Tokens (NFTs)
NFTs are gaining popularity and are the latest way for organizations and individuals to make money. They are mainly used to claim ownership of digital art. Blockchain solves the double-spending problem by ensuring that there is only one copy of the data available. As a result, NFTs can be stored on the blockchain, ensuring that only one copy of the digital art exists and can be sold once.
Applications of Blockchain Technology in Media (Artist Rights)
Blockchain technology is being widely adopted in the media industry to prevent fraud related to artist rights and organizations. Copyright infringement has been a major issue, with various music labels having their own policies. Adoption of blockchain can help in preventing such issues as it eliminates the double-spending problem. Apart from the media industry, there are many other areas where blockchain technology can be utilized, such as trade finance and supply chain management. The possibilities are endless.
Benefits of Learning Blockchain Technology
Blockchain technology has immense potential and a wide range of
applications. Currently, there is a high demand for blockchain developers,
but a limited supply. Developing a blockchain skill set can open doors to
many exciting career opportunities.
ADDITIONAL RESOURCES
Here are some helpful resources:
