When it comes to modern technology, the changes that the tech space is seeing are unprecedented. Whether it is artificial intelligence, self-driving, rocket technology, or even the processing power of personal computers, technology is having more of an impact on the way we operate than ever before.
In particular, an aspect of technology that is having a significant impact on the way decentralized finance, businesses, and computer programs work is in regard to blockchain.
What is Blockchain Technology and How does it Work?
Blockchain tech is a type of database – what makes it special is that it stores information in encrypted ‘blocks’. These are stored on nodes that are chained together in chronological order, and can be organized in a decentralized way, so that no single person, group, or entity has control over the data – this also means that the blockchain is immutable – any information recorded is permanent, and cannot be altered.
Most commonly, blockchain technology has been utilized as a ledger for cryptocurrency transactions. Cryptocurrencies such as Bitcoin and Ethereum will likely come to mind, where investors utilize something like cryptocurrency exchange Independent Reserve to buy and sell crypto – these transactions will be recorded on a public blockchain ledger, which ultimately is what gives cryptocurrency such interesting potential when it comes to future use.
Blockchain Use Cases (So Far)
When it comes to how blockchain is being used today, many people are often surprised to find that its utility extends far beyond just cryptocurrency and finance.
Firstly, IBM is using blockchain technology in a broad number of ways – in particular, one notable example is in regard to the role blockchain is playing in improving approaches to disaster recovery. Current disaster relief systems are disjointed and inefficient, with a number of entities such as community partners, insurance groups, and governments having to work together to ensure a streamlined recovery. IBM is working to implement blockchain with the goal of improving upon this process, improving on big data problems, and allowing more people and organizations to help by speeding up the integration process. This would include a shift away from paper-based recovery processes, thus reducing delays, miscommunications, and other problems.
Another example of this is with Microsoft – in 2019, they launched a fully managed blockchain service called Azure Blockchain Services. The aim of this service is to allow businesses to build and manage their own applications on blockchain technology, aided by integrations with services such as Flow and Logic Apps.
More generally, big businesses are including blockchain technology as part of their innovation efforts – whether this is in regard to Microsoft, IBM, or otherwise, cloud infrastructure and custom blockchain efforts are being developed and implemented in areas surrounding disaster relief, food safety, digital identity and everything in between.
Next, an important part of blockchain technology to consider is smart contracts, which are transforming the way data exchanges are executed.
Essentially, smart contracts are self-executing contracts that allow blockchain to act as a middleman between two parties – as a result, transactions, legal agreements, business deals and exchanges of data can all be executed without the need for a third party. This is achieved by integrating the agreements between a buyer and seller (for example) within lines of code that exist in a decentralized manner, across a blockchain network.
This is a technological development that will have significant implications – whether it is regarding costs and resources needed to complete a transaction, or the time taken to do so, smart contracts provide notable benefits. For example, in buying a house, a smart contract theoretically reduces or eliminates the need for third parties such as lawyers and brokers.
The Future of Blockchain
From 2017 to 2020, demand for blockchain skills increased by almost 2000%. It is clear that blockchain has a bright future, and big businesses in a diverse range of industries are all slowly integrating blockchain as a way to maximize efficiency and change the way they do business.
Ultimately, many experts agree that if an industry often requires multiple parties to access or edit the same data, if it is important that data is valid if business often relies on intermediaries, and if multiple parties are involved, blockchain can provide significant value. Regardless of the future, blockchain has already had a huge impact on the way businesses operate and transactions are made, with the crypto space being one of the best examples of this impact so far.