The Blockchain Disruption
Blockchain is a shared single version of the truth of anything digital. It is a database technology, a distributed ledger that maintains a growing list of data records, which are decentralized and impossible to tamper with. The data records are combined in blocks. In order to add these blocks to the distributed ledger, the data needs to be validated by 51 percent of all the computers within the network that have access to the Blockchain. The validation is done via cryptography, which means that a mathematical equation has to be solved. Once the validation is done, the Block will receive a timestamp and a so-called hash. This hash is then used to create the next block in the chain. If even one bit in the block changes, the hash will change completely and as a result, all subsequent blocks in the chain will change. Such a change has to be validated again by 51 percent of all the nodes in the network, which will not happen because they don’t have an incentive to work on ‘old’ blocks in the chain.
The blockchain technology provides intrinsic security due to following
1. Blockchain technology prevents individuals and groups from making transactions of assets they no longer have. This ensures that blockchain-backed assets cannot be spent more than once.
2. Blockchain networks operate on decentralised servers with data distributed across thousands or millions of computers. This means that assets could be exchanged using multiple hosts, hence hackers get rendered unable to target a single point of entry or a grid-network of servers.
3. Within a blockchain network, it is possible for transactions to transpire between two parties directly through the removal of the need for middlemen
Blockchain generally is being considered as financial technology application in terms of banking and financial instruments. However the impact of this technology is wide ranging in non financial areas which will start disrupting various industries in near future.
Non financial use cases of Blockchain currently being deployed:
App development: Proof of ownership of modules in app development
Digital content: Proof of ownership for digital content storage and delivery
Ride-sharing: Points-based value transfer for ride-sharing
Digital security trading: Ownership and transfer
Digitization of documents/contracts: Digitization of documents/contracts and proof of ownership for transfers
Decentralized storage: Decentralized storage using a network of computers on blockchain
Company incorporations: Digitizing company incorporations, transfer of equity/ownership and governance
Decentralized Internet and computing resources: Decentralized Internet and computing resources to cover every home and business
Industries already utilizing Blockchain
Hotels: Everyone knows Airbnb, USD 65 billion dollar startup. But it now has a competitor in Slock, which is eliminating middle-man leveraging blockchain allowing renters to use their smartphones to lock and unlock apartments. Great concept leveraging smart contract (a feature of “Bitcoin 2.0” technologies such as Ethereum). It’s only a matter of time when hotels chains will replace front-desk with robots and blockchain for all transactions. The key difference between Airbnb and Slack is that Airbnb has intermediary and Slock does not.
Financial: P2P payments Circle uses blockchain to send money anywhere, in any currency, without the friction (transfer delays and fees) of traditional clearance options like Western Union. Money could be in bitcoin or debit cards, credit cards like Visa/Mastercard — all this enabling faster, transparent cross-border transactions.
Consumer Goods Company: A common use case for consumer – IBM + Samsung partnership, ADEPT:
Detecting problems in washing machine i.e. autonomous maintenance. Checkout Samsung WW9000 washing machine that detects low detergent, automatically contacts the supplier with whom you have a contract, places the order and initiate transfer of payments and delivery. ADEPT (Autonomous Decentralized Peer-to- Peer Telemetry) uses BitTorrent to share files, Ethereum for smart contracts and TeleHash for peer-to-peer messaging.
Utility Company: German power company, RWE, changing energy delivery using blockchain. The POC is “car charging” with the charging station acting as a point at which both customer authentication and the processing of payments takes place.
Medical: Genecoin – helps back up your DNA on blockchain. Supposedly, there are medical use case for keeping DNA handy.
Consumer, Law Enforcement: UProov – helps timestamp your photos and videos and put it on blockchain. In this day and age, is no limit to the situations you can find yourself in needing to prove something that happened around you.
Blockchain technology is still in its infancy. However, the examples above and exploding internet penetration, highlight a universal truth – blockchain technology will finds its way to every industry in the world.