The State of Blockchain in 2020
Blockchain is one of the more significant, if not confusing, innovations of our time. What began as a way to transfer cryptocurrency has quickly expanded to cover many industries and applications. While many still do not understand blockchain and tend to avoid it due to a lack of knowledge, several industries are adopting the technology and seeing real results. Most recently, blockchain has been used in relation to the coronavirus pandemic. So, just what is blockchain and how is it being used in 2020?
An Overview of Blockchain
In the most simplest terms, blockchain is a list of blocks, or records, that grows. These blocks are linked through cryptography, or methods of secure communication that prevents outside parties from reading the message. The blocks contain cryptographic hashes, or mathematical algorithms, from the previous block. They also contain a timestamp and data for a transaction.
Blockchain was invented in 2008 by Satoshi Nakamoto, though no one knows who or what is behind that name. The original purpose of blockchain was to act as a public transaction ledger for cryptocurrency, specifically Bitcoin. Blockchain serves as a payment rail, or a payment platform that can move money from a payer to a payee.
Peer-to-peer networks manage a blockchain as a distributed ledger. The network adheres to a protocol that governs inter-node communication as well as the validation of new blocks. Data is recorded in the open, distributed ledger and cannot be modified. Retroactively altering the data impacts all subsequent blocks, and any modifications require the consensus of the network majority.
Benefits of Blockchain
Blockchain is still fairly new, and many shy away from it because of the unknown. However, there are considerable benefits for applying blockchain technology. The technology behind Bitcoin has expanded to serve many industries, bringing about more transparency and better security. The top benefits of blockchain include the following.
Security
Transactions are encrypted and linked to a previous transaction in a blockchain. Once formed, a blockchain cannot be altered, which eliminates a lot of the risk associated with corruption. Information cannot be falsified within a ledger and a blockchain is impervious to hacks.
A Trustless Nature
Parties are able to conduct transactions even if they do not trust one another. While many contracts or deals rely on signed paperwork or contracts, they also lean on a sense of trust. If one party delivers their end of the bargain, it is expected that the other party will do the same. However, with a blockchain, parties can safely conduct transactions without having to rely on trust.
Transparency
Blockchain records transactions in their entirety. The network is transparent, and every transaction or change within the network is visible for all parties involved. Blockchain is open to viewing, which adds accountability to all within the network.
More Efficient
There is no need for middlemen when it comes to blockchain. Transactions are facilitated much faster because digital currency can be transferred directly from party to party. Also, a complete record of ownership provides efficiency for some industries. The lack of middlemen also lowers cost by reducing the number of third parties involved in a transaction.
Companies Using Blockchain
Many industries have adopted the use of blockchain and many more are researching how blockchain can be incorporated into their practices. Some organizations have yet to adopt the technology because it is still mysterious for many, but early adopters are already seeing a real benefit from blockchain.
Cryptocurrencies
Cryptocurrencies, like Bitcoin, Ethereum, and Litecoin, all rely on blockchain to make transactions. These transactions do not require a regulating authority, such as a bank, and greatly reduce the fees associated with transactions.
Trading Platforms
Trading platforms, like Trade.io and WeTrade, are using blockchain to enhance their security. They can also lower costs, especially those associated with server maintenance.
Logistics
Blockchain stores data that cannot be altered or lost. Logistics and transport companies like MOVA and Arcade City are using blockchain to keep track of supply chain as well as transport history.
Fashion
Blockchain can increase trust among trading partners and consumers, which is being seen in the fashion industry. The entire lifecycle of a garment is visible because blockchain is able to streamline the supply chain.
Blockchain and the Coronavirus
A recent study from NPR found that many people trust public health experts over world leaders, local officials, or news media for obtaining health updates. As the coronavirus changed life as we know it across the globe in early 2020, people became desperate for accurate and timely information. Blockchain technology may be able to provide a new layer of trust when it comes to tracking the coronavirus.
Jim Nasr, CEO of Acoer, uses blockchain for a data visualization tool. He is able to provide real-time information on COVID-19, creating a tracker for the virus that uses computational trust. Data is put into the system, which creates a reference file to match the information back to the source. The blockchain confirms the file and includes a timestamp. The information is then recorded securely and made available for public review. The log of data on the coronavirus is tamperproof, providing accurate information.
As the United States House of Representatives attempts to send direct subsidies to US citizens during the COVID-19 pandemic, they are considering the use of the digital dollar. The use of digital wallets has been proposed as a way to ensure money reaches individual citizens, and Ethereum has been tapped as a potential provider.
Originally published at https://www.itblock.sg on March 30, 2020.
