Blockchain beyond the world of cryptocurrencies

What is Blockchain?

Blockchain is a revolutionary technology that has become the basis for decentralized digital systems (in which participants share all necessary computations among themselves without resorting to the resources of centralized systems). It functions as a distributed digital book or register that records transactions in a secure, transparent, and immutable manner. The basic idea is that the records (“blocks”) are connected in a chain where each block contains a cryptographic hash of the previous block, thereby ensuring the integrity and immutability of the data

Advantages of blockchain

Blockchain has a number of advantages that make it attractive to various industries:

• Decentralization: unlike traditional databases, blockchain does not have a single central control body. The data is distributed among all network participants, making the system more resistant to failures and hacking.
• Transparency: all network participants can view transactions stored in the blockchain. This ensures a high level of transparency and trust in the system.
• Consistency: records in the blockchain cannot be changed or deleted after they have been added. This ensures data integrity and protection against manipulation.
• Security: cryptographic mechanisms such as hashing and digital signatures provide a high level of data protection. Each block contains a unique hash of the previous block, making it almost impossible to change it without affecting the entire system.
• Smart contracts: are programs that automatically execute agreements between parties based on specified conditions. Smart contracts allow automating processes and reducing dependence on intermediaries.

How blockchain is changing other areas of life

Although blockchain has become known for cryptocurrencies, its application goes far beyond this sphere. Let’s look at a few key industries where blockchain has already begun to play an important role.

1. Supply chains

One of the biggest challenges in logistics is tracking the origin and movement of goods. Blockchain can provide transparency throughout the supply chain by providing detailed information about each stage of delivery from the manufacturer to the end consumer. This reduces the risk of fraud and increases consumer confidence in the products they buy.

Examples:

• Walmart: It has partnered with IBM (International Business Machines) to create a platform that allows tracking the supply of fresh produce and meat. They have already tested the system on mangoes in the US and pork in China.

2. Health care

In the healthcare sector, blockchain significantly improves the processing and protection of medical data. Patients can control access to their medical records, and doctors can receive accurate and up-to-date data, which allows them to improve the quality of treatment. In addition, blockchain can help fight counterfeit medicines by ensuring transparency in the pharmaceutical supply chain.

Examples:

• MedRec: This project uses blockchain to create a medical record management system that gives patients control over their data and allows secure access to it, for various healthcare providers.
• Nebula Genomics: It uses blockchain to ensure confidentiality and control over patients’ genetic data.

3. Real estate

In the real estate sector, blockchain facilitates the process of buying and selling and reduces the number of fraudulent transactions. Thanks to smart contract technology that automates the fulfillment of contractual terms, real estate transactions can become faster and safer. In addition, all property records can be stored on the blockchain, ensuring that they remain unchanged and accessible.

Examples:

• Propy: A platform that allows real estate transactions to be conducted via the blockchain, simplifying legal processes and reducing the time and cost of transactions.
• RealT: It uses the blockchain to tokenize real estate, allowing investors to purchase property shares in the form of tokens.

4. Data management and identification

Blockchain can become the basis for new personal data management systems, where users control who has access to their information. This could be useful in many areas, such as financial services, social media, and online commerce.

Examples:

• Civic: Uses blockchain to create digital identity solutions that allow users to store and manage their personal data.
• uPort: A platform that gives users control over their personal data by providing secure identification and authorization.

5. Energy

In the energy sector, blockchain can help optimize energy distribution and metering processes. In particular, the technology can be used to create decentralized energy networks where users can trade excess energy directly with other consumers, without intermediaries.

Examples:

• Power Ledger: A platform that allows consumers to buy and sell surplus energy directly among themselves via the blockchain.
• WePower: It uses blockchain to create energy tokens that allow investors to support renewable energy sources.

6. Management of public services

The use of blockchain in government agencies can significantly increase the transparency and efficiency of public services. This can be applied in areas such as voter registration, issuance of licences and certificates, and management of public resources.

Some key aspects where blockchain can be useful include:

• Digital signatures and authorizations: Blockchain can provide a secure and immutable system for verifying digital signatures and credentials, which can prevent fraud and unauthorized access to government data.
• Distributed identification system: The use of blockchain to create decentralized identification systems allows citizens to store and control their personal data, reducing the risk of compromise.
• Voting systems:  Blockchain can ensure the transparency of the electoral process, allowing citizens to vote without the risk of losing or falsifying their votes, while maintaining the confidentiality of personal data.
• Public service management: Blockchain can be used to manage data related to government services, such as land registries, mortgages, taxes, and deeds, ensuring transparency and protection of this data.

Examples:

• Voatz: A blockchain voting platform that allows for secure and transparent elections using mobile devices.
• Bitfury and Government of Georgia: Georgia became the first country to use blockchain for land registration, ensuring transparency and protection of property rights.

7. Finance and accounting

In the financial sector, blockchain is becoming an increasingly popular means of maintaining accounting records. Some of the most prominent financial organizations are already using this technology to ensure the accuracy and integrity of their financial records. Blockchain can greatly simplify audits and increase the credibility of financial reports.

Examples:

• Ripple: A platform that uses blockchain to provide fast and cheap international payments. Ripple cooperates with many large banks, such as Santander and American Express, to optimize the transaction process.
• JPMorgan Chase’s Quorum: It is a blockchain platform designed to improve the privacy and speed of financial transactions. It is used for interbank transfers and various financial transactions.
• PwC Blockchain Audit: PricewaterhouseCoopers has developed a blockchain solution for auditing to ensure transparency and accuracy of financial statements.
• Mastercard Provenance: Uses blockchain to increase transparency in the supply of financial products and services, allowing customers to track every stage of a transaction.

8. Commercial transactions and the stock market

Blockchain is being used to conduct commercial transactions in various markets, including the stock market. Thanks to its ability to ensure transparency and speed of transactions, blockchain can significantly increase the efficiency of trading in shares and other financial instruments.

Examples:

• Nasdaq Linq: It is the first blockchain-based platform designed to track securities transactions. It allows companies to issue and track shares securely.
• Australian Securities Exchange (ASX): It is using blockchain to replace its clearing and settlement system. This allows to increase efficiency and reduce the cost of conducting transactions with shares.
• tZero: A subsidiary of Overstock.com, which is working on the implementation of blockchain in securities trading. The platform allows for secure and transparent trading operations.
• Securitize: A platform that uses blockchain to tokenize assets and provide access to them for investors. This allows to simplify asset management processes and make them more accessible to a wide range of investors.

Differences between blockchain and conventional storage

Blockchain is a technology that provides a new approach to data management that is not only different from traditional storage systems, but also opens up new opportunities for many industries. Understanding these differences helps to assess the potential of blockchain and understand how it can be used in different contexts.

Comparative table:

Conclusion

Blockchain has a huge potential to transform various sectors of the economy and society. With the development of the technology, new solutions and projects are emerging that allow blockchain to be used effectively in various fields. From the introduction of decentralized financial services (DeFi) to the creation of new data management models, blockchain opens up new opportunities for innovation and development.

Thanks to its unique properties, blockchain is becoming an increasingly popular tool for solving complex problems faced by modern society. Its potential is far from being exhausted, and every year we see more and more examples of successful use of this technology in various fields.