A blockchain is actually a digital ledger of transactions that is copied and distributed across the network of computer systems. Each of the blocks generated after every transaction holds various information about the transaction and gets itself updated in every participant’s ledger which once written cannot be changed. Every participant in the chain of transactions is a vital part of the network.
In simple terms, it is distributed database that everyone can get a copy of. Every person with a copy can add new records to this database but cannot change any record that’s already in there. So, how can it be used? Let us start with the most obvious and most popular applications of blockchain and that is:
- Cryptocurrencies: A cryptocurrency is a digital currency, basically designed to be used as a medium of exchange wherein each coin ownership record is stored in a decentralized ledger. Cryptocurrencies use ‘decentralized control’, which suggests that they are not controlled by one person or government. When Bitcoin launched in 2008, it allowed people to directly transact with each other without having to trust third parties like banks. Since then 4000 different cryptocurrencies have been created. Some examples are Bitcoin, Ethereum, Dogecoin, Fantom, etc. The blockchain is the technology behind cryptos where all the exchange or transaction information is stored which cannot be hacked or changed and a copy of the ledger is distributed among all the participants of the network. It records every single transaction. Each and every person can buy/sell or deal in cryptos and be a part of the network. Nowadays, several financial applications provide a user with the luxury of doing so.
- Cars: Let us see how can blockchain be used in cars. Ever heard of odometer fraud? By tampering with the odometer, someone can make a car appear to be newer and less worn out, resulting in customers paying more than what the car is actually worth. The government tries to encounter by collecting the mileage of cars when they get a safety inspection, but that’s not enough. So, instead, we could replace regular odometers with smart ones that are connected to the internet and frequently write the car’s mileage to the blockchain. This would create a secure and digital certificate for every car. And because we use a blockchain, nobody can tamper with the data/information, and everyone can look up a vehicle’s history to ensure it’s correct. In fact, this has already been developed used by Bosch’s IoT lab and they are currently testing it on a fleet of 100 cars in Germany and Switzerland.
- Legal Documents: So, blockchains are great at keeping a good track of data over time. So, besides odometers, you can keep track of things like intellectual property or patents or it can even function as a notary. A notary is someone (for example the Central Government) who can confirm and verify signatures on legal documents. But we can just as well use blockchain for it. The online website stampd.io as an example, allows you to feature the documents to the Bitcoin or Ethereum Blockchain. Once, a document has been added you can always prove that you simply created a document at a particular point of time very similar to a notary, although right now blockchains are not on the same level as notaries in a legal perspective.
- Digital Voting: Another interesting application is digital voting. Right now voting happens either on paper or EVM (electronic voting machines) which are special computers running proprietary software. Voting on paper costs a lot of money and wastage and electronic voting has security issues. In recent years we have seen countries move away from digital voting and adopting paper again because they fear that electronic votes can be tampered with and influenced by hackers. In our country as well, we have seen politicians fight over “EVM hack” things. But, in place of paper ballots or EVMs, we could use blockchains to cast and store votes. Such a system would be very transparent and everyone could verify the voting count for themselves and it would make tampering with it very difficult. The Swiss company Agora is already working on such a system and it is going to be completely open-source. But there are many challenges. First, you have to be able to verify voters without compromising their privacy. Secondly, if you allow people to vote with their own computers or phones, you have to take care of the situation that those devices might be infected with malware designed to tamper with the voting process. And a final example: a system like this also has to be able to withstand denial-of-service attacks that could render the whole thing unusable. Definitely, a very tough nut to crack but if it becomes reality it could make for a more transparent and practical voting system.
- Food and Medical Industry: They could use blockchain technology to track their food products from the moment they are harvested or made, to when they end up in the hands of the customers. See, every year almost half a million people die because of food-borne diseases and that’s partly because it takes too long to isolate the food that is causing harm. Blockchains could help us to create a digital certificate for each package of food, proving where it came from and where it has been. So, if contamination has been detected i.e. the manufacturer wants to revert a batch of food because of certain quality issues, we can trace it back to its root and instantly notify other people who bought the same batch of bad food. Walmart and IBM are the two big giants currently working on such a system. It allowed them to trace the origin of a box of mangoes in just 2 seconds, compared to days or even weeks with a traditional system. A system like this could be applied to other similar industries as well. We could use it to track medicines, and other regular products and battle counterfeit goods by allowing anyone (the officials in general) to verify whether or not the product comes from the original and authentic manufacturer.
- Logistics and Supply-chain: Another idea would be to track packages and shipments using blockchain. That is something that IBM and container shipping giant Maersk Line are working on a decentralized ledger to help with making the global trade of goods more efficient. Many hackathons on blockchain have this topic for college students to build the project. It is still in the development phase and companies are trying to come up with such a system to track their package pinpoint.
- Smart Contracts: So far, we have looked at ways blockchains can be used to keep track of information and verify its integrity. But blockchains are even more powerful when we use them as smart contracts as one of its applications. These contracts live on the blockchain and can perform actions when various conditions are met. Insurance companies could use smart contracts to validate claims and keep a record of all the people who are buying insurance and paying their premiums on time so as to continue the terms of the policy. Or they could allow us to only pay for car insurance when we are driving. But it goes even further, with smart contracts we can our own data on a blockchain. In the same fashion, you could store your personal identity there and choose what data you want to reveal.
- Original Content Creation and Royalties tracking: Think about collecting royalties for artists. A beautiful idea for the use case would be streaming platforms could set up two smart contracts: one where users send a monthly subscription to and one that keeps track of what song or video a particular user is consuming and how many times the song has been played or a video being watched. At the end of each month, the smart contract that holds the subscription fee can automatically distribute the money to artists, based o how many times their songs have been played. People can have smart contracts for their content and have proof that they were the creators and no other. Mediachain is one of the companies working in the music industry using blockchain and smart contracts. Similarly, smart contracts can be used in other places as well, some of them are:
Blockchain technology can be used in so many different ways and we are still discovering and finding other ways out. This list is just a brief of what things are happening around this space. Similarly, other applications are:
- Real Estate: Propy, a California-based company is using blockchain as a title registry system for property ownership with distributed and decentralized systems.
- IoT Devices: Filament, a Nevada-based company, creates IoT microchip hardware and software that lets the connected devices run on blockchain technology. The product’s encrypted and secured ledger data distribute information to other blockchain-connected devices and allow monetization of machines based on the usage of time stamps and others. A cybersecurity company, HYPR, is using this technology to secure IoT devices with a decentralized credential system. By taking passwords away from a centralized system to make devices even more secure and unhackable.
- Documents: Many countries are adopting blockchain technology to store their data and people’s data, this way they are bringing transparency and security to the documents like birth certificates, social security numbers, and voter registration cards, and much more.
- Non-Fungible Tokens (NFTs): These are the new trend in the world after crypto-currencies survive upon blockchain technology. The year 2020-2021 gave rise to digital items at par. NFTs are also digital items that include videos, photos, arts, GIFs, and other media that are sold over blockchain such that the owner of the media created can claim his/her full rights. The Nyan cat meme that was a trend in 2011, that GIF was sold for $600,000.
- Gambling: The gambling industry can use blockchain to provide several benefits to players. With the help of the blockchain there is a transparency between the potential gamblers. The transaction are recorded in the blockchain network, game could be played fairly.
- Big Data: The every computer in the network is trying to verify the information stored in it, making blockchain an excellent tool for storing data with its immutable nature.
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