The Guiding Principles Behind the Groundbreaking Technology
First introduced in 2008 and implemented from 2009 in the form of cryptocurrency Bitcoin, the Real-world applications of the secure Blockchain technology are now fast increasing.
The World Economic Forum has estimated that “Almost 10% of the gross domestic product of all the countries in the world could be driven by Blockchain by 2025”.
We can see the uses of Blockchain in many industries such as supply chain, manufacturing, transport, farming, logistics, food production, etc. But, let us first understand – What is Blockchain?
Definition of Blockchain
The definition of Blockchain as per Merriam-Webster states that it is a digital database containing information that can be simultaneously used and shared within a large decentralized, publicly accessible network.
In simple terms, Blockchain is a highly secure record-keeping mechanism, not having a centralized location. It stores data in a distributed network across several computers at different locations, and regularly reconciles the information into the database.
Blockchain is Secure
Blockchain is secure and transparent at the same time. Its technology combines the principles of game theory, P2P technology, and cryptography.
Blockchains are of three primary types viz.,
- Public Blockchains like Ethereum and Bitcoin;
- Private Blockchains including R3 Corda and Hyperledger;
- and Hybrid Blockchains like Dragonchain.
Key Differentiators Between the Three:
Public Blockchains – They are permissionless Blockchains that allows all nodes to have equal rights to access data, create transactions, validate transactions, and produce new blocks.
Private Blockchains – They are permissioned Blockchains that do not allow all nodes to have equal rights. Privacy is essential in these closed Blockchains. The authorities or owners select few nodes who can create new blocks.
Hybrid Blockchain – Hybrid Blockchains combine the benefits of both Public and Private Blockchains. They perform transactions quickly in their private chain while providing immutable trust from Public Blockchain and scaling from Private Blockchain.
The technology offers several advantages such as:
- Security
It stores information in the form of blocks, and the programming of Blockchain is such that a single user on the network cannot edit any block on the chain, thus providing a very high range of security.
- Irreversible Audit Trial
The technology groups transactions together every ten minutes into a block and links them back to the previous blocks, thus forming a continuous Blockchain. Due to its unique design format, it can easily locate any problem and correct it.
- Speed of Transaction
Blockchain has especially reduced the transaction time in the banking sector concerning inter-bank and cross-border transactions.
Different uses of Blockchain
With advantages such as immutability and resilience, Blockchain is fast driving real solutions across the world. Blockchain has many other applications, apart from its uses in the supply chain, manufacturing, transport, farming, logistics, and food production.
- Digitizing the real estate space
Motivated by the fight against fraud and transparency, the governments of Ukraine, Georgia, and Sweden are transforming real estate transactions and land registry using Blockchain.
- Managing medical records
MedRec is using Blockchain to bring together disconnected pockets of client data as they move between providers, and share it securely, confidentially, and only between authenticated caregivers.
- Tracking diamonds
The De Beers Group is using Blockchain technology to create a digital record for every diamond registered on the platform, including its source and where it went.
- Settlement mechanism
Victims of a catastrophe such as a hurricane, flood, fire, or earthquake need financial aids and quick settlements. In the US, the authorities uses Blockchain for the settlement of catastrophe bonds as it can survive such disasters and continue to function without human intervention.
The Conclusion:
Even though Blockchain provides several benefits, it also has few limitations, which include high costs, greater power consumption, bigger file size, and complex technology. However, it is developing further, and hopefully, it will be perfect soon.
