Blockchain is the basis for crypto-currency and tracking some financial transactions. Its potential uses promise to radically transform industries.
—By Karen White
A few years ago, analysts were predicting the foundational technology called blockchain could radically shift the entire economy, similar to the impact of the internet. For the average consumer, blockchain is equivalent to crypto-currency, but in reality it is called foundational because it serves as the base technology for new systems that do things like secure business transactions.
As the technology continues to mature and its uses continue to expand, forward thinkers are considering its future possibilities. As the list of possibilities grows, experts are beginning to believe blockchain could, and probably will, transform the economy. For the first time in history, secure transactions are generated without an intermediary, traditional financial or governmental institutions, or owners.
Democracy of Technology
Imagine a database with no one in charge that anyone can add to, if they are capable of generating the right data bits, and that has a protocol that everyone accessing it agrees on. It is a true democracy of sorts because anyone can participate and there is no governance other than computer verification of the blocks of data.
Ethereum is one of the distributed software platforms arising from the development of blockchain and is public, open-source, and decentralized. It is also one of the platforms that records the programmed blockchain without censorship, fraud, manipulation or interference from third parties like the government, financial system or cyber-thieves.
Its fail-safe design and open accessibility make Ethereum unique in the history of humankind, and it offers unlimited potential to change any process involving authentication. Blockchain was first used to create cryptocurrencies like Bitcoin, and Bitcoin was a reward for successful blockchain programming.
Since its introduction, blockchain has been slowly entering the mainstream. It is already used as a verification process for financial and insurance transactions. For example, Ripple offers Ripplenet as a means for connecting banks and payment providers for secure global money exchanges. Ripplenet runs on blockchain technology and is used by recognizable companies such as RBC, American Express, MoneyGram, and Santander.
The use of blockchain to process financial transactions is just the tip of the iceberg. Blockchain has unlimited potential, and its ability to radically alter industries can potentially have the same impact on the economy as the internet.
Think of it like this: There are trillions of transactions that never take place because they cannot be authenticated, controlled or fraud-proofed. In the distributed open-source system, anyone can safely complete transactions, and it will enable systems that are currently limited by lack of security.
Think big, like the city of Dubai. It partnered with IBM and ConsenSys to develop the technologies to become the first "blockchain-powered government" by the year 2020. It has already converted its online payment portal called DubaiPay to blockchain technology for real-time reconciliation and settlement of transactions generated by 27 government entities and 14 non-government organizations. There are plans for blockchain-based vehicle management, banking transactions, tourism transactions, health system management, education and other government sectors. In the business arena, there is the belief that blockchain will improve and expand business processes with customers, suppliers, B2B, and collaborative systems. It will surely lead to new business models.
Authentication is a core need in many industries.
In the pharmaceutical industry, blockchain could track prescription medicines and contribute to the effort to reduce misuse of medications. Merck is already testing a blockchain-based prescription system.
Another potential use of blockchain technology is replacing the current equity trading platforms, speeding up the flow of transactions and eliminating the three-day waiting period for stock transaction settlements.
Blockchain is certainly in its earliest stage, but rest assured the best minds in the world are working on applications. They are developing impressive projects like combining artificial intelligence and blockchain.
Applied in the healthcare industry, blockchain could strengthen protection of private information by limiting access to only those who have the access key.
In the world of art, blockchain could enable a secure authentication system by linking the physical piece of art to a digital record stored in a registry. There is already a tamper-proof CryptoSeal available that is attached to the art and cannot be removed without causing serious damage. Manufactured by Chronicled, the blockchain-registered solution is used for asset identification, artwork packaging and logistics tracking, and supply chain provenance.
The power of blockchain to change government and business is accepted. Now think bigger. Think of changing the world by improving people's lives.
That is how big Coca-Cola is thinking. Non-currency applications are coming soon, and the beverage company is leading the revolutionary way. The company partnered with the U.S. State Department, Emercoin, Bitfury Group and Blockchain Trust Accelerator to create a blockchain-based registry for workers in foreign countries. The purpose of the registry is to ensure employers adhere to work contracts, minimizing abuse of people working in forced labour conditions.
Smart contracts, first made popular by Ethereum, will enable verification, facilitation and enforcement of contracts. The contracts provide the details of pay, scope of work, and employment period, and making them "smart" via blockchain will promote fair labor treatment on the part of employers.
Now think romaine lettuce. The multiple outbreaks of E. coli have demonstrated the difficulty in tracing food back to its source. Blockchain could resolve that issue, tracking food from field to plate.
Think voting. Blockchain could remove voter fraud and the need for recounts, and it could enhance the process for casting, tracking, and counting votes.
Think Internet of Things (IoT). Samsung and Sony are working on a blockchain-type technology that will serve as the backbone for a decentralized network of IoT devices. Devices will not need a central hub and can communicate autonomously. In an early use of the ADEPT (Autonomous Decentralized Peer-to-Peer Telemetry) system, autonomous washing machines reorder detergents and replacement parts, and they manage scheduling for servicing equipment based on smart contracts.
This gives an idea of the pervasive coming of blockchain technology. Blockchain is certainly in its earliest stage, but rest assured the best minds in the world are working on applications. They are developing impressive projects like combining artificial intelligence and blockchain.
Think radical. Blockchain will assuredly and radically change industries and, in doing so, radically change economies.