A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Blockchain has been in a lot of buzz these days. And that is mainly because it is backbone of the very famous cryptocurrency in the world – the Bitcoin.
Many Governments and leading Banks have decided to bring many of their conventional transactions based on Blockchain concept. The applications and potential of this framework is huge and is considered to be changing the way transactions are made in various domains.
What is Blockchain Technology?
- Blockchain technology is a design। that stores transactional records (known as the block) of the public in several databases (known as the chain) in a network connected through peer-to-peer nodes. This storage is assigned as a digital ledger.
- The three key principles of blockchain technology are transparency, decentralisation and accountability.
transaction blockhain process
1. Financial Services
New numbers show that the asset management industry could cut costs by $2.7 billion every year by moving to blockchain tech.
Practical applications of blockchain in the financial services industry include client screening and onboarding, recordkeeping, data privacy and security, and trade processing.
Similarly, the insurance industry is fraught with errors and costly mistakes. The FBI estimates that over $40 billion a year is lost through fraud across all non-health insurance industries.
- RiskBlock, a proof-of-insurance product, helps insurers save time and money through automated processes, and it helps insured individuals validate their insurance claims securely and quickly.
2. Smart Contracts
Blockchain and smart contract technologies function well in instances where valid contracts are required to maintain ownership rights and data privacy laws. These customizable, self-executing smart contracts on the blockchain can be easily handled by all parties.
Issues with ownership rights and royalties are normal within the entertainment industry. To navigate these issues, blockchain technology offers an unchangeable, traceable, real-time distribution and reporting network for all involved.
- Ujomusic is one such application that is helping artisan track their royalties worldwide.
3. Digital IDs
According to the World Bank, over 1.1 billion people worldwide still have no way to prove their identity. At the same time, companies and financial institutions in both traditional and digital markets are being required to follow more forcefull know-your-customer (KYC) initiatives.
Despite this, many providers are still not sufficiently meeting these standards; to further complicate things, regulations vary widely from jurisdiction to jurisdiction.
- Companies like IBM, Microsoft, and Cisco are migrating to the blockchain to securely and privately verify users.
4. Blockchain Internet of Things (IoT)
Gartner predicts that 20.4 billion IoT-connected devices will be active by the end of 2020, with some estimates showing the IoT market will reach $3 trillion annually by 2026.
Blockchain-enabled IoT devices would operate faster and more securely for both users and businesses─enabling less centralized control over the financial industry, internet usage, and ownership rights.
- Helium uses a decentralized machine network to simplify connecting anything to the internet through a blockchain, wireless network, and open-source software.
What is the blackchain good for ?
Blockchains are a fascinating new technology. They enable fully decentralized databases, resistant to censorship and potentially allowing for system adoption in critical applications like money and identity
In a blockchain network, different blocks contain data about transactions, trades, and contracts within the system in cryptographic form.
For example, blocks may contain details about a financial transaction, medical records, or even voting results. All blocks are lined up in a chain and are interconnected, so in order to create a new block, the information about old blocks should be sequentially read first.
Allowing digital information to spread, but not be copied, the blockchain technology created the foundation of a new kind of Internet. The network was originally developed for the digital currency — Bitcoin — but the technical community is currently looking for other potential applications of this technology.
Where Is Blockchain Being Used?
Although we mostly know about blockchain due to its application in the financial area, the network is currently implemented in the following spheres:
- Finance. Blockchain technology mostly influenced fintech; it has greatly improved the speed of transactions, simplicity, and security.
- Government. Blockchain technology is used for a series of political issues, for example, the storage of voting records.
- Healthcare. Blockchain is a great tool when saving large amounts of patients’ confidential data, as well as securing it.
- Education. Nowadays, blockchain solutions are used for simplifying the process of documents verification in the Californian Holbertson School, and many other institutions are on their way to implementing the network.