The use of blockchain technology is no longer restricted to cryptocurrency transactions as it has found its application in all industries ranging from real estate to healthcare. Let’s dig into some of the major applications of blockchain technology.
Blockchain Technology: An overview
If you are new to blockchain, understanding its applications can be a hassle. By definition, “blockchain is a technology that consists of blocks (list of records) that are connected using cryptography. Each block features a cryptographic hash, transaction data, and timestamp. One of the standout features of blockchain is that it is resistant to data modification. In simpler words, blockchain is a digital ledger of financial transactions that is incorruptible and can be programmed to record everything of value. Blockchain consists of blocks; a block is a collection of data, and blockchain is a combination of blocks that are linked with each other in chronological order.
Applications of Blockchain
From creating a new cryptocurrency to enhancing your IoT experience, the blockchain technology can provide applications in almost every sector of the market, along with individual experience.
Let’s dive into some promising blockchain applications.
#1. Financial services
Blockchain technology is not only influencing but redefining the current infrastructure of the financial market. From global capital markets architecture to backend clearing & settlement, areas of the financial sector are experiencing significant activity range. Distributed ledger systems in the cases mentioned above are decentralized, which need not be in some cases. Therefore, many financial institutions are developing their private blockchain.
#2. Government sector
Not only private industries, but governments are also using the blockchain technology to improve their services and establish better and more transparent citizen-government relations. Distributed Ledger Technology can optimize business processes with the help of more secure and efficient data sharing and processing.
#3. Healthcare
Blockchain technology will soon disrupt the centralized operations of the healthcare industry and will open opportunities for optimized service and business delivery. Blockchain promotes security, efficiency, and transparency, a few factors essential for healthcare companies. Blockchain can be used to create smart contracts, which can be operated automatically without the involvement of a third-party for document verification and pen-and-paper processing. One of the major challenges in the healthcare industry is the flagrant administration, which prevents patients from receiving the best possible care. However, with automation, we can expect a reduction in this bureaucracy.
#4. Identity
The concept of digital identities is gaining popularity and is emerging as a significant part of everyone’s connected world. However, with so much information levitating online, security becomes a significant concern. Blockchain provides a convenient engine for powering digital identities. Blockchain-powered identity systems use distributed ledgers and hardened cryptography, which offers a solution to security-related concerns.
#5. Internet-of-Things (IoT)
One of the most trending applications of blockchain is its integration with IoT. IoT is a relatively new concept with regards to connectivity, and blockchain technology offers an optimal engine for powering it. In upcoming years, the overall value of the IoT market is expected to cross the $1 Trillion Mark, with Blockchain playing a crucial role in this massive growth. Blockchain and IoT together can provide an incredible system to track the history of millions of upcoming smart devices shortly.
#6. Insurance
Blockchain technology shares data in a secure, efficient, and transparent manner, which allows the insurance industry to optimize its business processes. Using blockchain technology can help revolutionize insurance policy shifts onto smart contracts that are operating seamlessly on peer-to-peer networks. Moreover, the use of blockchain can help in phasing out pen-and-paper processes.
#7. Money
Cryptocurrency is the primary application of blockchain that offers people an instant, frictionless, and secure way to make financial transactions. Traditional payment systems include central authority involvement, which users don’t prefer as it increases the chances of tampering of payment transfer. Blockchain technology, on the other hand, eliminates this method by providing a transparent user-to-user environment, which does not require the involvement of a third party.
#8. Music
How does blockchain work in music? Well, it might not affect the listeners, but blockchain technology has undoubtedly changed the way artists can produce their music and control their musical work. Royalty payments, ownership rights, and first edition rights, blockchain technology, enables artists to promote their work and extend their ownership rights.
#9. Real Estate
Real estate is one of the most paper-based industries, and blockchain will shortly turn out to be its foundational pillar. Blockchain in real estate can allow for an upgrade in recording and storing records. Blockchain technology can also empower the real estate industry by facilitating essential functions like payments, titles, escrows, along with reducing fraud, speeding up transactions, internationalizing markets, and enhancing financial privacy.
Drawbacks of Blockchain
Although blockchain technology offers various advantages, it poses certain disadvantages, as well. Let’s quickly talk about some drawbacks of using blockchain technology.
● Blockchain consists of miners that can exhaust a significant amount of electricity.
● Blockchain is not a distributed computing system, and all the nodes in the blockchain do the same thing: verify a transaction, record it, and store it in records. The blockchain technology lacks mutual assistance, paralleling, and synergy, and offers nothing but a duplication
● Mining does not maintain the security and stability of a blockchain. Moreover, if the miners combine, they can rewrite the blockchain record, which hinders data security.
● Blockchain entries are not immutable and can be erased or altered.
● Blockchain is not scalable.
● A blockchain is not inevitable and can be destroyed.
● Blockchain is open, which can be a disadvantage to some. In business transactions, too much transparency can be dangerous, and the excessive transparency of blockchain is a downside.
The bottom line
Blockchain technology is one of the most emerging technologies and is widely used in all industries and sectors. From real estate to healthcare, blockchain has found applications due to an efficient, secure, and transparent data sharing. Blockchain’s integration with IoT is regarded as a revolutionary discovery, and it offers a plethora of future development opportunities. However, it poses some drawbacks as well, especially higher energy consumption and excessive transparency. But still, blockchain technology requires more advancement to make it accessible to everyone.
