Blockchain is the next step in the evolution of theinternet. Created by the entity known as Satoshi Nakamoto, blockchain wasinitially developed to solve the problem of double-spending in digitalcurrency. Blockchain went on to be the basis for Bitcoin as it is an accurate,public ledger that doesn’t rely on central management and is virtuallyimpregnable. It is gaining popularity for its potential in other applicationsand industries.
Blockchain’s collaborative maintenance means that iteliminates middlemen and creates a transparent ledger that ensures accuracy andreduces the chances of fraud. It does this by requiring validation from allholders of blockchain keys. It makes fraud almost impossible as everystakeholder must approve any addition to or alteration of the blockchain.
What does the future hold?
The three most important roles a blockchain performs arerecording transactions, establishing identity and establishing contracts. Thatit can perform these three functions almost instantly with complete accuracymakes it revolutionary and its potential endless.
Currently, regardless of how slick digital operations become,they’re still at the mercy of old-fashioned systems, such as banking, and howwell they integrate with new and emerging tech. Go-betweens, such as PayPal,have bridged the gap to an extent, however they are a conduit rather than asolution or an advancement.
In the short term, blockchain’s biggest impacts will be feltby the financial sector. Currently, fees are big business for banks. Fees forstoring your money, fees for spending your money, fees for withdrawing,transferring or even looking at the too small figure on the screen.Decentralising the ledger and eliminating the bank’s role as middleman willallow for faster, cheaper and more accurate transactions. Blockchain andcryptocurrencies are borderless, so there will be no difference between sendingmoney across the country or around the world. It will ensure that the moneymakes it to its destination without the “trusted third party” shaking down bothends of the transaction.
Imagine household utilities where manual meter reading isreplaced by a smart contract — a self-executing contract that uses “if thatthen this” lines of code stored securely in a blockchain. Gas or power usagecould be monitored in real-time, then when certain conditions are met, such asthe level of usage, the provider is automatically paid. This automates not onlythe billing and payment processes, which can be done in a rudimentary way nowwith direct debits, but the whole process from beginning to end and in acompletely transparent way. The provider and the customer can both see exactusage at all times, eliminating the chance of human error. No more estimatedreads because the meter reader is scared of the dog, or misread meters.
Medical records, currency transfers, supply chain management– the list of potential applications is long and varied. A blockchain isessentially a spreadsheet duplicated across a network of computers. The networkis designed to update the spreadsheet regularly, with the changes reflectedeverywhere it is stored. It is impossible to tamper with data undetected in ablockchain. It is designed on the premise that all eyes will be watching andverifying any changes or additions. Users will only be able to edit the blocksin the chain they “own” and will require the right crypto-key to write to thefile.
While blockchain has huge potential, at the moment there isa gap between the theoretical and the practical. Blockchain could theoreticallyturn the energy industry on its head with the sale and trade of renewableenergy by private citizens, however, that kind of storage capability is stillin the embryonic stages. The Tesla Powerwall is the most well-known example ofthe technology attempting to embrace the concept, however the cost is stillprohibitive at this stage. As the reality catches up with the imagined, thetrue value of blockchain will become apparent.