What is Blockchain Technology?
Blockchain is one of the most promising technologies of the future. A blockchain is a digital ledger created to capture transactions conducted among various parties in a network. It is a peer-to-peer, Internet-based distributed ledger that includes all transactions since its creation. All participants (i.e., individuals or businesses) using the shared database are “nodes” connected to the blockchain, each maintaining an identical copy of the ledger. Every entry into a blockchain is a transaction that represents an exchange of value between participants (i.e., a digital asset that represents rights, obligations, or ownership). In practice, many different types of blockchains are being developed and tested. However, most blockchains follow this general framework and approach.
How Does BlockChain Technology Work?
When one participant wants to send value to another, all the other nodes in the network communicate with each other using a pre-determined mechanism to check that the new transaction is valid. This mechanism is referred to as a consensus algorithm. Once a transaction has been accepted by the network, all copies of the ledger are updated with the new information. Multiple transactions are usually combined into a “block” that is added to the ledger. Because each block contains information that refers back to previous blocks, all blocks in the chain are linked together in distributed identical copies.Participating nodes can add new, time-stamped transactions, but participants cannot delete or alter the entries once they have been validated and accepted by the network. If a node modified a previous block, it would not sync with the rest of the network and would be excluded from the blockchain. A properly functioning blockchain is thus immutable despite lacking a central administrator.
The Impact of Blockchain on Industries
Blockchain technology offers the potential to impact a wide range of industries. The most promising applications exist where transferring value or assets between parties is currently cumbersome, expensive, and requires one or more centralised organisations. A specific activity attracting significant interest is securities settlement, which today can involve multi-day clearing and settlement processes between multiple financial intermediaries. Certain financial services experts believe the financial services industry is on the verge of being disrupted. Advances in innovative technologies such as blockchain are expected to transform the industry and its workforce by automating many of the activities currently performed by humans.
Let’s see below the top industries where interest in blockchain technology and its potential transformative benefits has been high:
Finance and banking
Banking is one of the foremost sectors that is poised to be disrupted by blockchain technology. Several stock exchanges around the world are piloting a blockchain platform that enables the issuance and transfer of private securities. Additionally, multiple groups of banks are considering use cases for trade finance, cross-border payments, and other banking processes.
Industry of Life Sciences and Healthcare
The healthcare industry has been in need of a significant disruption. Healthcare organisations are exploring the use of blockchain to secure the integrity of electronic medical records, medical billing, claims, and other records.
The Real Estate Industry
This industry will most certainly be one of the most affected industries by block chain technology, can reduce that considerably by allowing all transactions to take place in the digital landscape.
Consumer and Retail Industrial Products
The Blockchain makes it possible for us to enjoy a retail system where buyers and sellers interact without the need for a middleman. Companies in the consumer and industrial industries are exploring the use of blockchain to digitize and track the origins and history of transactions in various commodities.
Energy and Resource
Ethereum is being used to establish smart-grid technology that would allow for surplus energy to be used as tradable digital assets among consumers.
Supply and Logistics
With this system, companies and businesses can document transactions and stock levels in a centralised repository for secure and transparent monitoring.
The public and government sectors
Government services could potentially be reshaped with the help of blockchain technology. Governments are exploring blockchain to support asset registries such as land and corporate shares.
Since all businesses track information and face the challenge of reconciling data with counterparties, blockchain technology has the potential to be relevant to everyone. The first major adoptions, however, may be business processes and old legacy systems that are cumbersome to maintain.