Blockchain has the potential to be one of the most disruptive technologies in the business world to date. It’s currently creating great interest as it makes the move to the mainstream. As developers of applications at the cutting-edge of new technology, we’re responsible for guiding our clients through this transition and ensuring the apps we create are futureproofed, which is why we’re delighted to offer blockchain as a new service.
But first things first, what exactly is blockchain? You may have heard of it mentioned alongside terms like Bitcoin and cryptocurrency, but for many people, it remains an entirely nebulous concept. Hopefully, we’re going change all that with our blockchain guide…
What is blockchain?
Very simply, blockchain technology is a method of documenting digital assets. The term ‘blockchain’ is used because information is stored in records, called ‘blocks’, which are linked in a ‘chain’ using cryptography. Each block contains a timestamp and data relating to a transaction, someone’s identity, an agreement between two parties or any number of other data types.
By design, blockchain is resistant to modification of the data making it extremely safe. That’s because the blockchain isn’t stored in a single location, so there’s no centralised version of the information. That makes it impossible for a hacker to corrupt it. Instead, the blockchain is hosted by a network of computers simultaneously, which means it cannot be disputed, removed or altered without the knowledge and the permission of the wider community.
Well, quite. Here’s an analogy that will hopefully make blockchain technology a bit clearer.
Imagine if you will the vault in a bank where all of the safety deposit boxes are kept. Each of those safety deposit boxes is made of glass, so everyone can see the contents (the data) inside. When someone fills a new safety deposit box, they receive a key that’s unique to that box. But even though they have a key to the box, the box is still not technically theirs. They only have the ability to access what’s inside.
No? Okay, perhaps this video can do a better job…
Removing the middleman
The real beauty of blockchain technology is the fact that in some industries such as banking, it can remove the need for the middleman. Rather than keeping information in one central point, like a bank, multiple copies of the same data are stored on different devices in a peer-to-peer network. That means, if one piece of data is damaged or lost, numerous other copies remain safe and secure elsewhere. Similarly, if one piece of information is changed without the agreement of the rightful owners, there are countless other records where the information is accurate, which makes the false record obsolete.
By replacing third-party intermediaries as the keepers of trust, blockchain can reduce overhead costs, speed up transactions and quickly prove the ownership of information.
Potential blockchain applications
Originally devised for the digital currency Bitcoin, the truth is we’re still discovering new ways this nascent technology can be used. That has led to an explosion in the design and development of new applications including:
- Marketing – This is a subject in its own right that demands a separate article. In short blockchain is providing companies with additional, innovative methods to demonstrate their brand or product offering. It is worth pointing out that digital assets on the blockchain can be ‘smart’. A good example that was recently used by Heineken illustrates this point; consumers were given – via an app – an empty pint glass that filled each time it was shared with a friend. Each friend got an empty pint glass themselves and after sharing 5 times, the pint glass was full and could be exchanged for a real pint at participating retailers.
- Healthcare – Blockchain technology can be used to encode and store personal health information with a private key given to specific individuals so they can access the records. Alternatively, receipt of surgery could be stored on blockchain and automatically sent to insurance providers as proof-of-delivery.
- Music – There are perpetual problems in the music industry regarding ownership rights. Blockchain can potentially solve those issues by creating a comprehensive and accurate decentralised database of the relevant information.
- Personal identification – We currently carry multiple forms of identification, such as a driving license, identity cards and passports, for different purposes. That could all change with a digital ID that is open source, secured by blockchain and replaces all previous forms of physical identification.
- Voting – There’s often talk of vote rigging around the world, although thankfully not here in the UK. Blockchain could prevent the rigging of the voting system by creating an encrypted record confirming that an individual has voted and who they voted for.
- Cross-border payments – The global payments sector is often costly, error-prone and open to money laundering. It can also take days for the payments to be received. Blockchain can enable more efficient payments, with payments being made 24 hours a day and clearing the next day.
A world of new opportunities
The impact blockchain can have on many of our day-to-day tasks is huge. Not only can it improve the efficiency, speed and security of many business processes but it can also help to support more open and fair societies.
To find out more about how blockchain can propel your business forward, please get in touch with our team.