Updated: Feb 21, 2022
In order to know how blockchain technology is disrupting the world, one needs to know what blockchain is. It sounds complicated, but its core concept is really simple. A blockchain is a type of database, it is a collection of information that is stored electronically on a cloud or computer system.
Blockchain is one type of a specific database. The way it stores information is how it differs from a typical database. A blockchain collects information or data together in groups, also known as blocks, and they hold sets of information. Each block has certain storage capacities and, once it is filled, they are chained onto the previously filled block, thus forming a chain of data known as the “blockchain.” Any new information that has to be added is compiled into a newly formed block which then will also be added to the chain once filled.
Since its inception, blockchain has been breaking the current scenario of data management. Most data management follows a centralized system. Blockchain technology depends on decentralized concepts, entirely against the current centralized system.
Financial transactions, public administration, data management and tourism are a few such areas in which Blockchain is implemented gradually. One can aim to improve transparency in administration, as a whole. Blockchain is highly used to increase security for financial transactions and data management. It aims at the reduction of costs and improved efficiency.
Why Blockchain is considered to be disrupting the world
Blockchain creates a secure and trustable ecosystem that works automatically. It avoids the threats of fake transactions or documents. It puts an end to sectors where pyramidal and hierarchical organizations are no longer needed. Since it is decentralized, nobody owns the network, hence the network acts as the supreme authority.
Because of the decentralized nature of blockchain, all transactions can be transparently viewed by either having a personal node or using blockchain explorers that allow anyone to see transactions occurring live. Each node has its own copy of the chain that gets updated as fresh blocks are confirmed and added. This means that if you wanted to, you could track your transaction wherever it goes.
For example, exchanges have been hacked in the past, where those who kept Bitcoin on the exchange lost everything. While the hacker may be entirely anonymous, the Bitcoins that they extracted are easily traceable. If the Bitcoins stolen in some of these hacks were to be moved or spent somewhere, it would be known.
Why use blockchain?
Blockchain has some very strong pros that is fast making it the go-to choice for data and financial transfers and storage. Here are a few:
Blockchain can significantly change how your critical information is viewed. By creating a record that is encrypted end-to-end, and can’t be altered, blockchain helps prevent fraud and unauthorized activity. Privacy issues can also be addressed on blockchain – personal data is anonymized, and unauthorized permissions prevent access. Information is stored across a network of computers rather than a single server, making it difficult for hackers to view data.
Blockchain uses a distributed ledger, so transactions and data are recorded identically in multiple locations. All network participants with permission-to-access see the same information at the same time, providing full transparency. All transactions are immutability recorded, and are time- and date-stamped. This enables members to view the entire history of a transaction and virtually eliminates any opportunity for fraud.
Blockchain creates an audit trail that documents the origin of an asset at every step in its journey. In industries where consumers are concerned about environmental or human rights issues surrounding a product — or an industry troubled by counterfeiting and fraud — this helps provide the proof. With blockchain, it is possible to share data about origin directly with customers. Traceability data can also expose weaknesses in any supply chain — where goods might sit on a loading dock awaiting transit.
Increased efficiency and speed
Traditional paper-heavy processes are time-consuming, prone to human error, and often require third-party mediation. By streamlining these processes with blockchain, transactions can be completed faster and more efficiently. Documentation can be stored on the blockchain along with transaction details, eliminating the need to exchange paper. There’s no need to reconcile multiple ledgers, so clearing and settlement can be much faster.
Transactions can even be automated with “smart contracts,” which increase your efficiency and speed the process even further. Once pre-specified conditions are met, the next step in transaction or process is automatically triggered. Smart contracts reduce human intervention as well as reliance on third parties to verify that terms of a contract have been met. In insurance, for example, once a customer has provided all necessary documentation to file a claim, the claim can automatically be settled and paid.
Bitcoin has a very strong brand in the digital currency space. It is one of the best-known applications of blockchain technology. This technology provides Bitcoin, with a verifiable ledger of transactions. The best part of the blockchain is to provide security to the ledger. Hence blockchain does not permit any middlemen nor banks to take full control of digital money. Every block in the blockchain is distributed to various people of the network thus the control does not exist to one sole proprietor or a firm.
The music industry is trying to transform with blockchain technology. It can be used for music streaming. It is used to ensure musicians are paid fairly and quickly for streams and sales of their work. The blockchain increases transparency. This would be beneficial for artists to see into the process of splitting royalties. This will avoid the publishers and record labels who were to hold the royalties before giving them to artists so far. This is possible only because of blockchain technology.
This revolutionary technology has been developed to build an anti-counterfeit solution. It brings transparency from the blockchain to supply chains. It can verify diverted goods, counterfeit products, fraudulent transactions, and stolen merchandise. Some of the best solutions used to fight counterfeits will include pharmaceuticals, luxury items, diamonds, and electronics.
One of the most important strategies to rein in the spread of coronavirus infection is contact tracing. That is to track and isolate the close contacts of infected individuals. Many countries, including Germany, South Korea, Norway, and Singapore, have developed contact tracing applications to control the outbreak; Its effectiveness may be riddled with the challenge of data breaching and insecurity.
Blockchain technology collects information from contacts without identifying them. This system does not expose any personal identifiers; this is achieved by the use of a digital fingerprint or key to label each patient.
Third parties such as Car Insurance providers and other TPAs often involved during the lifetime of a vehicle. This is especially true for cars used for business purposes. The blockchain can access information related to a vehicle that is needed by these third-party services. Blockchain systems coordinate shared rides, identify vehicle owners, check the ownership of vehicles, auto insurance, vehicle recall optimization, ownership transfer, and identification of auto parts.
By controlling the core properties of blockchain technology, including the transparency of transactions, the immutability of data, and data security, public health agencies and governments can address many problems, taking the world several steps ahead and heightening the global economy back to normalcy.
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