The blockchain technology (BCT) used in crypto currency like Bitcoin is making waves worldiwde. The companies are waking up to embrace this disruptive technology which is likely to change the way we do business. Many consulting firms have opened up who promise to implement the blockchain technology for your business which creates a decentralised and secured way to safeguard your business data. The applications of this technology are rising every passing day. The blockchain technology is useful for Payment processing and money transfers, Monitor supply chains, Data sharing, Copyright and royalty protection, Digital voting, Digital Ids, and many more. As more and more businesses worldwide are going digital, many of the conventional systems have become obsolete. With the use of blockchain technology, the information stored can be updated and made available in real time to all the stakeholders. As more and more people are becoming aware of the benefits of BCT, the technology is finding many takers in varied segments. Sandeep Sharma takes a closer look at the blockchain technology...
WHAT IS BLOCKCHAIN TECHNOLOGY?
The Blockchain name is derived from a chain of blocks.
A block is a data structure which allows Blockchain to record the transactions, and each block is linked to the chain by cryptography. Blockchain is a new age technology which makes use of the distributed ledger, also called as registry or database, to store data and transactions. The distributed ledger has three attributes: recorded, transparent, and decentralized.
Blockchain forms participants in a P2P distributed ledger to records transactions safely and interact with each other via a trustless method. All participants would keep and update a copy of distributed ledger to check and validate transactions which makes Blockchain transparent and impossible to hack or lose any data.
The data is not centrally stored unlike the conventional methods, but it is a chain of data that is managed by a cluster of computers. The cryptographic principles are used to secured the distributed data. Due to the decentralsed data storage, it becomes tamper proof.
In the good old days and even now to a great extent, the centralised database could be easily targeted for hacking and tampering.With implementation of blockchain technology one can be assured of the data security. The transactions done through this system are fast, reliable, and highly secure. The delay in providing information or data sharing is no more. It is available in real time. Blockchain technology, which was used as a cornerstone of Bitcoin. Bitcoin is supported by the Blockchain protocol to ensure that the information remains immutable. This protocol was proposed by a group of researchers in 1991 to timestamp digital documents and makes it impossible to backdate or tamper with them. Blockchains improve trust between participants by having multiple points of verification. Blockchains create permanent records that cannot be edited or deleted.
BCT uses a transparent distributed ledger, which allows the users to access all the information needed including the past transaction history, for completing a new transaction.
The blockchains are categorized as public, private or hybrid based on the participants.
Expediting energy futures trading and compliance:
Energy and commodity trading blockchain technology has the ability to transform the energy and commodity trading market space resulting in market efficiencies and significant cost savings for traders Real Estate transactions: The blockchain-based smart contracts can potentially transform core real estate operations such as property transactions like purchase, sale, financing, leasing, and management transactions.
A digital ID solution for citizens, businesses and government bodies is possible using blockchain technology. Bermuda has already started development of a Blockchain-based National ID System.
Switching to Digital voting using blockchain technology can ensure the required level of transparency.Payment processing and money transfers The blockchain technology can enable P2P funds transfer without the need to have intermediaries or banks to approve transactions. The technology can speed up payments at lower rates than those charged by banks. Blockchain technology can reduce operating costs by enabling real-time transactions between financial institutions
Data Management & Sharing
The blockchain technology could simplify the management of trusted information, making it easier for government agencies to access and use critical public-sector data while maintaining the security of this information. Blockchain technology allows different parties to share and manage data stored online without the need for a central authority.
Monitoring supply chain
The blockchain technology based supply chain offers greater efficiency than ever before.
Tracking prescription drugs
The blockchain offers drugmakers the ability to track their products based on their unique serial and/or batch numbers to ensure that consumers are getting genuine products when they pick up medicine from the pharmacy.
Wills or inheritances
Instead of creating a paper will, people may have the option of creating and storing their digital will on a blockchain network.
Using blockchain technology, medical records can be secured and made available wherever needed. The patient, having the access key to the digital records, would be in control to share and know who all have access to these critical records.
Securing access to belongings
Using blockchain, the consumer can secure access to their assets and belongings. Selective access can be granted to service providers or technicians to perform repairs and service to keep your assets in a workable state.
Data backup and recovery
The blockchain is best suited for the data backup and recovery solution as it can touch all pieces of data, stored in any location.
Copyright and royalty protection
In a blockchain–based copyright management system, legal protection of users is based on records. In a situation where someone is using copyrighted works on blockchain, the copyright owner may assert their rights to prevent infringement.
Before adopting the blockchain technology on a larger scale, there are number of challenges that needs to be addressed with robust solutions.
1) The scalability is an issue with the blockchain technology. The tech is not capable to handling large volume financial transactions since multiple nodes are necessary to validate each transaction thus leading to slow down of the transaction speed and increase cost per transaction.
2) The blockchain process offers enhanced security as nobody can secretly modify the ledger entry. Each change has to be validated by multiple nodes. But the security issues can occur in case of 51 per cent attack. If an individual or group has more than 50 per cent of the mining power, it is 51 per cent attack, which prevents other miners from creating blocks or making any transactions altogether. 3) The blockchain doesn’t follow any standard rules and regulations. 4) Setting up initial blockchain infrastructure is costly.
As the blockchain technology is explored further, the existing challenges will be addressed with newer solutions. The technology is quite promising and can lead to a complete paradigm shift in the process management and execution.