Many people think about blockchain as a technology that powers Bitcoin only, while this was its original purpose blockchain is capable of so much more. Blockchain in simple word is a distributed ledger technology that can be programmed to record and track anything of value, from financial transactions to medical records or even land titles. It's a decentralized system in which encrypted transactions are entered into a ledger that is shared by multiple parties.
But what's so special about blockchain? Let's break down reasons why blockchain technology stands to revolutionize the businesses forever..
Although the concept of smart contract is very old they were first introduced in blockchain world by Ethereum project in 2015 and is considered to be the biggest advancement in blockchain technology since the launch of Bitcoin.
Smart contracts are programmable, self-executing contracts that are stored and executed on the Blockchain. They are capable of doing anything that a human mind can think of. Smart contracts running on blockchain 2.0 (Ethereum blockchain) are only confined to blockchain and have no link with real-world data. But Oracles introduced by Blockchain 4.0 (aeternity blockchain) allows smart contracts to communicate with the real-world data. Blockchain prevents smart contracts from being altered and eliminates fraud, along with the need for lawyers.
A simple use case of a smart contract is to pay the dividend to company shareholders in case profit crosses some threshold value. Oracles collect data from the outside world and verify whether or not profit has crossed the threshold value before giving the dividend.
Blockchain in Healthcare
Blockchain is a game-changer in the health sector. To get an insight into this, let's see how blockchain can help deal with a major problem in the pharmaceutical industry i.e. Drug counterfeiting. Here are few facts about drug counterfeiting.
Blockchain has a fix for that, authenticity and traceability of the drugs can be established by registering only trustworthy drug manufacturing companies on the blockchain. For that private blockchains is required that is controlled by a central entity to ensure that fake drugs are not registered. A company's access to the "drug blockchain" would, therefore, be proof that the drugs they produce are authentic.
This is not all, Blockchain technology allows every detail of patient like his medical record, insurance status etc to be stored in a central location without compromising data security and integrity. This, in turn, means that data can be accessed by multiple healthcare providers which helps in a higher probability of accurate diagnoses, more effective treatments, and the overall increased ability of healthcare organizations to deliver cost-effective care.
Blockchain in Banking Sector
Few Fintech technologies have disrupted the banking industry more than blockchain. Although biggest opponents of cryptocurrency, the banking industry has finally succumbed to the blockchain revolution. According to Harvard business review, blockchain Will Do to the financial system what the internet did to media. The blockchain is the internet of value that gives us the ability to not only transmit the information but value in the blink of an eye to anyone anywhere in the world. Blockchain distributed and secure platform can help banks in saving billions of USD in maintaining their infrastructure (remote branches, offices) and security of their physical as well as digital assets. Santander published a report in 2015 stating that "blockchain could reduce banks infrastructure costs attributable to cross-border payments, securities trading and regulatory compliance by between US$15 – 20 billion per annum by 2022". Faster transaction rate and improved data quality are some big deals for banks.
IBM is developing a new blockchain based banking solution for financial institutions that will address the process of global payments. The solution is designed to lower both cost of transfer as well as transaction settlement time for consumers.
Seeing these use cases it is evident that it will be difficult for businesses to avoid blockchain in days to come and these are just few examples of how blockchain is transforming the business. This technology even has frontiers that are even yet to be explored.