Blockchain – a mechanism of credibility for business?

Blockchain – a mechanism of credibility for business?

Dubai wants all visa applications, bill payments and license renewals to be transacted digitally using blockchain by 2020. This fact should convince all those who still have doubts whether Blockchain is a technology worth being interested.

Blockchain technology is based on a set of distributed registers. In fact, this is a list where encrypted transactions between users are saved in a digital ledger. A single transaction is combined with other transactions and saved in a block containing detailed transaction data, which is attached to previously existing blocks, creating a chain. Theoretically changing it is possible but would be exorbitant large amounts of energy, etc. so practically the chain is inseparable and impossible to change.

What problems can be solved by Blockchain?

Data storage and data verification, peer-to-peer transactions security, resistance to hacker attacks, increased trust – these are the areas in which we can expect revolution causes by blockchain.

  1. Irreversibility and no possibility to change the transaction – the data storage model in Blockchain make the data impossible to edit. Information in a chain is coded to provide full security. The idea of creating a sequence of the following blocks, and then distributing information to all users of the network about changes gives a guarantee of the invariance of data contained in the chain.
  2. Data security – information stored in the blockchain is decentralised. It does not have one, pre-determined administrator, and is distributed among network users. This approach ensures security in the face of more and more popular hacker attacks. Destruction or modification of information on one of the users has no impact on the functioning of the network as a whole because verification is made by the “voice of the majority”. Increasing the level of trust is the essential feature of blockchain technology. No possibility of editing information in the chain and eliminating the administrator person provides users with a sense of security.

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How does the implementation of this technology look like in reality?

An example of real technology is the Trusted Lending Circles established in 2016 – a decentralised platform for financial products based on Etherneum Blockchain. The key assumption is reducing costs and limited availability of loans, and maintaining full transparency of the transaction without necessity third-party manages. The platform creates an environment for concluding smart contracts based on Blockchain technology and therefore give an efficient, automated way to save and borrow money.

Another example of technology implementation is the Modium.io shipment monitoring system. It is a combination of IoT sensors with Blockchain technology, which guarantees the integrity and accuracy of data collected by sensors, thus ensuring that the shipments reach the appropriate quality, and data connected with them are not modified.

Irish company created a platform based on Blockchain technology for the transparent distribution of humanitarian aid. Creating individual cards and a system of transferring funds based on Blockchain, minimised the risk of corruption and control how the money is spent.

Issuing certificates and licenses. Smart contracts. Elections. These are just a few next ideas that appear around Blockchain technology, and we can be sure that the list expands. Blockchain can revolutionise any industry where the third party as a manager of the transaction is necessary and where we need a convenient and secure way of sending and storing information.

Sources:

https://tlc.wetrust.io
https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/study-blockchain-impact-moving-beyond-hype.pdf
https://nakamotoinstitute.org/bitcoin/