Blockchain technology has probably been the most revolutionary invention in the internet world in the 21st century. It is, by all means, an ingenious invention. But what exactly is blockchain- a layman would ask. Well simply put, it is the answer to most of our modern day woes.
Blockchain can be explained as a network of computers, as defined in this free EBook for dummies on cryptocurrency by SixPl, all having access to a specific data, designed in such a way to regularly update that data and store it. Hence we have a database that isn’t present or stored in any one location but is accessible to every computer present on that network. Therefore the blockchain eliminates the risk of a hacker corrupting the information present in the network since there is no centralized data. Hence blockchain is also called a decentralized ledger.
While talking about blockchain, it is imperative to shed some light on cryptocurrency and bitcoin. The brainchild of Satoshi Nakamoto, an individual or a group of individuals using the given pseudonym, cryptocurrency has given blockchain a whole new meaning after its humble beginnings in the late 1970s. Bitcoin has become the face of cryptocurrency, being the first cryptocurrency to be invented in the year 2008 by Satoshi Nakamoto. Although it is not the only cryptocurrency available with ethereum, litecoin, and dash all gaining ground in recent years, bitcoin remains the most popular one. However, it is important to mention that without the blockchain technology, neither bitcoin nor any other cryptocurrency would exist. It is because the blockchain acts as a market and thereby facilitates the flow of bitcoin or any cryptocurrency for that matter.
HOW DOES BLOCKCHAIN WORK
Blockchain works on the very same principles that are pertinent to its definition. As previously mentioned, the computers or nodes present in a blockchain have access to a specific data, and it is regularly updated and stored. Now to understand the working of a blockchain let’s assume that someone requests a transaction. To complete this transaction, the following processes must be followed-
- The requested transaction is directed to a peer to peer network consisting of computers or nodes.
- This transaction is verified by the network of nodes with the help of the available user information.
- Once authenticated, the operation is added to other deals and a new set of data is created for the ledger.
- This new blockchain is then added to the existing blockchain, in a permanent and unalterable way. The operation is thus complete.
BENEFITS OF BLOCKCHAIN TECHNOLOGY
There is no end to what the blockchain can achieve and how many industries it can actually disrupt and eventually revolutionize. Cryptocurrency is one field that is dependent solely on the concept of the blockchain. Using cryptocurrency removes any intermediary like a bank between two people and helps them deal directly with each other which, in turn, cuts down the fee which is charged by the banks since cryptocurrency charges much less than these traditional banks. Also, there are a large number of people in the world who are still outside the banking fold, but all that cryptocurrency requires is a smartphone and an internet connection, and you are all set to go. Thus cryptocurrency has the potential to make the banking sector entirely redundant. However, even without cryptocurrency, blockchain technology has the potential to survive and thrive all on its own. Here are a few areas in which blockchain can play a significant role-
Allegations of rigging the election results marred the 2016 US elections.Blockchain can play a significant role in this regard since it can be used for registration and verification of the voter, and electronic vote counting to ensure that only legitimate votes are considered, and no votes are tampered with. In fact, creating a publicly viewed list of the polled votes can be a gigantic step in creating a robust democracy through fair elections.
Government operations are often slow and opaque, and therefore chances of corruption by government officials are always higher. Using blockchain based systems can help reduce bureaucratic hurdles and can increase transparency, efficiency, and security of governmental organizations.
- RETAIL AND REAL ESTATE:
Both retail and the real estate have so far functioned by engaging intermediaries or brokers to carry out deals between sellers and buyers. Using a blockchain system can efficiently filter out any such middlemen or intermediaries from such exchanges and thus reduce the cost of such transactions by ruling out any associated fees. Also, dealings in the real estate sector can be made a lot more comfortable by solving issues like bureaucracy, lack of transparency, fraud, and mistakes in the public record. Using blockchain technology can speed up the transactions by reducing paper-based record keeping, tracking, verifying ownership and ensuring the accuracy of documents.
- SUPPLY CHAIN MANAGEMENT:
The supply chain management can be made more transparent and cost effective with the use of blockchain technology because it offers the benefit of traceability. Goods can be traced to the point of their origin, and their movement and quantity can also be tracked using the blockchain system. If there is any irregularity somewhere along the supply chain, it can be traced back to its point of origin. This can be very effective in the food sector where quality assurance and safety are very crucial.
Since blockchain eliminates the possibility of human error, running transactions through the blockchain system protects the data from any tampering. Information is verified every time it passes from one blockchain to another blockchain. The audit trail that it leaves behind only contributes to the transparency and integrity of the company’s financial information.
- SMART CONTRACTS:
Contractual transactions can be very time consuming and can throttle the growth of a business. Through the blockchain system, contracts can be automatically examined, signed and enforced; thereby, eliminating the need for mediators and saving the company a lot of money and time.
COMPANIES USING BLOCKCHAIN MARKETING
Although blockchain technology has been around since the 1970s, there have been only a few takers of this system so far. However, with further advancements in this technology and taking cognizance of the vast potential that this system has, quite a few companies have started using the blockchain technology for marketing purposes in a variety of ways.
- BRAVE AND THE BASIC ATTENTION TOKEN:
The Brave browser has introduced the Basic Attention Token (BAT) with an aim to block trackers and intrusive ads. The user also has the option of allowing advertisements that respect his privacy.
- BABYGHOST AND VECHAIN:
Babyghost is a fashion brand that worked with blockchain platform VeChain at the Shanghai Fashion Week. VeChain uses the blockchain technology to ascertain if an item is original or not.
BitClave is a marketing technology company which is based on the blockchain. It works on the premise that instead of paying high fees to middlemen like google and facebook, they eliminate the middleman through the use of smart contracts.
- ORINOCO IN:
OrionCoin is helping customers redeem their reward and loyalty points offered to them from various franchises. Since there is a finite number of ORC being produced, it will become more valuable as more companies adopt it. And since there is a limited supply of ORC, customers feel more motivated to accumulate them. Thus, by dishing out ORC to their customers instead of reward points that are mostly unattainable, companies can retain more customers for the long term. Also, since the customers can use ORC by trading it for cash, ORC proves beneficial not only for the marketers but also for the customers.
However, like any other human-made system, blockchain has its downsides too. Due to the complex structure of the blockchain and the computer science concepts involved, it can intimidate or even scare away otherwise would-be users. Also, cryptocurrency has its share of risks. Cryptocurrencies can be subject to cybersecurity breaches and can fall into the hands of hackers. This may lead one to lose his entire fortune.
Moreover, since cryptocurrency isn’t widely used as a medium of exchange of money, there is a lot of volatility in its prices. Nevertheless, it won’t be long before these issues are resolved, and the blockchain technology can be used on a massive scale. Because at this point it isn’t a question of the survival of blockchain technology but of how soon it can be expected to be a part of mainstream dealings.