According to a recent Deloitte Survey, 55% of senior executives at large US companies think that failing to invest in blockchain technology will leave their companies at a competitive disadvantage in the future. Of the remainder, a staggering 39% state that they have little or no knowledge of the technology.
As the world continues to implement digital technology and connect economically, the stakes are higher than ever when it comes to the security of databases and intellectual property. If you’re a part of the group without blockchain knowledge, it’s high time to become familiar.
What is Blockchain?
Blockchain technology is one of the most promising innovations in cyber security. It ensures that data is 100% trustworthy. Originating from the mind of an unknown creator using the pseudonymous name, Satoshi Nakamoto, blockchain was initially adopted in 2008 to enable the digital currency, Bitcoin. Blockchain is now unveiling its potential to the world, exhibiting promise in many different services and industries.
A block is merely a list of transactions. A blockchain consists of a single block that is replicated and continuously updated across many different computer servers. Because there are many copies of the block, no single party can alter its contents, rather the block must be updated with all servers agreeing on the transaction. This makes fraud nearly impossible and makes a blockchain a secure and transparent method of facilitating online transactions.
The data in the blockchain is a collection of all chronological transactions, with no transaction ever forgotten. The copies of the blockchain are stored identically and sequentially on many computers, known as nodes, worldwide. The traffic between nodes is encrypted.
In an interview with the Director of IBM Blockchain Labs, Nitin Gaur gave a description of blockchain technology and its potential: “We are trying to address the problem of time and trust. ...Blockchain to me is the value of back and forth [with] an implied sense of trust ...which enables faster transfer speed.” By building a network that contains trust, blockchain eliminates the need to verify, which facilitates a faster, better and cheaper way to transfer value.
What Are The Uses For Blockchain?
Blockchain is demonstrating very exciting potential for revolutionizing many different industries. For example, Gaur visualizes huge benefits to our healthcare, legal and supply chain management systems. He says:
“There is an enormity of inefficiency in the healthcare system that could benefit from ... blockchain technology. In the US alone, healthcare is a trillion dollar problem and there are a lot of issues surrounding regulation.”
Implementing blockchain technology into healthcare could boost the efficiency and organization of patient records. Gaur describes doctors and medical personnel having the capability to access patient information that is not only more reliable due to the continuous linking of files and documents of the patient’s history, but more easily organized and transferred to medical organizations to maintain consistency of a patient’s experience and needs. Along with healthcare, Gaur believes that blockchain will have a significant role in transforming legal services. Blockchain can be used to detect any sort of corruption or error. An example would be providing more transparency and understanding between government agencies and those who regulate them, further improving the relationship between the two.
Advocates of blockchain technology also claim that it can provide great benefit to supply chain management. It can play a major role in ensuring long-term, stabilized supply chains, all while making the process faster and delivering more reliable and efficient transactional records. This is due to blockchain’s ability to create reliable records of orders and transactions marked with timestamps that are distributed and stored in a manner that eliminates the ability to tamper with them. Due to the decentralization of its database, blockchain ensures reliable record keeping with the distribution of data across a range of secure systems. Companies will be able to observe dependable and easily read patterns within the supply chain. This allows for long term planning for the production and distribution of a company’s product, creating a stabilized structure.
How is Blockchain Replacing Traditional Technology?
As research and development continues to progress, advocates for the widespread use of blockchain predict a significant shift from traditional technologies. An example would be using blockchain to support digital currency to replace traditional currencies. Gaur sees this shift from traditional monetary methods as more trustworthy and beneficial.
“Many countries’ economies have a version of dark money and black money,” says Gaur. “If you move to additional fiats, the fact that it’s going towards additional trust systems makes it more accountable in this network and we would know exactly who owns what.”
This could explain why there is a significant increase in the exploration of blockchain technology by the banking industry. Digital payment methods have seen an extraordinary amount of growth and adoption with apps such as Apple Pay and Venmo gaining serious traction with consumers. Venmo alone has experienced a soaring rate in volume, processing 17.6 billion in payments, doubling their 2015 numbers. As banks and financial institutions continue to embrace this digital payment method, the concern of security is of course a concern due to the ever growing threat of hackers, who have demonstrated their devastating capabilities with numerous banking hacks over the years. In 2015, several financial institutions began investigating blockchain as a means to keep online data safe. Banks such as JP Morgan, UBS, and Barclays partnered with the financial technology company, R3, to works towards establishing a standard for a public ledger through blockchain technology.
There is a very clear change that is taking place across the world in how companies and organizations view blockchain technology. What began as a mysterious algorithm for digital currency is now quickly becoming viewed as one of the most groundbreaking technologies for creating mutual trust across multiple parties. Experts and advocates of blockchain confidently predict its global adoption and believe the benefits of its implementation will be revolutionary.