Blockchain was invented by Satoshi Nakamoto in 2008, then to serve as the public transaction ledger of the Bitcoin cryptocurrency. Blockchain is a decentralized, distributed ledger. It has a few key properties, that make it a fundamentally different and game changing technology:
· Digitized: Information on blockchain ledger is digitized, hence eliminating manual documentation
· Distributed: Identical replicas of information is shared across all participants on the blockchain. A centralized authority is not required to audit data. Also, if one node fails, there will be no disruption since remaining nodes still have copies of the blockchain. This also results in better security.
· Chronological: Each block added to the blockchain links to the previous block in the same transaction. This allows for a trackable trail of the transaction.
· Immutable: Once a new transaction is recorded on the blockchain, it can never be edited. This means the data can be fully trusted.
· Consensus-based: A transaction on blockchain only occurs when all parties approve it.
Blockchain platform builds upon blockchain and constructs the underlying infrastructure of many real-world applications. When using blockchain as a platform with a scripting language, many use cases can be addressed.
Blockchain platforms expand blockchain capability because developers can launch their own blockchain projects. For example, Ethereum’s blockchain platform “Ethereum Virtual Machine” (EVM) has been used to create over 1000 Decentralized Applications (DApps). Smart contracts allow this to happen. Smart contracts are code which allows the execution of functions, based on fulfilling certain prerequisite conditions. While the backend code runs on a decentralized blockchain comprising smart contracts, the frontend is code that can be programmed in any language. This is DApp. DApps store data in the blockchain, and following the ideas of blockchain technology, no one central authority is able to control the majority of the crypto tokens that power the DApp.
As a result of smart contracts and DApps, blockchain platforms are more scalable and allow for widespread adoption. This allows for further use cases on the enterprise level, allowing developers to build on the benefits of blockchain for applications in a variety of real world situations. With the advent of many different blockchain protocols, such as Ethereum, Hyperledger, VeChain, each with differences that affect the use case, more industries can find the right blockchain technology to adopt that best fit them. For example, a key differentiating feature of Hyperledger is that it only allows explicitly trusted entities to join. Access to information in the blockchain, unlike blockchains such as Bitcoin, is restricted to certain roles. The implication is a high relevance to the banking industry and other innovative enterprises, whom do not wish for proprietary knowledge to be available to everyone but want to reap the benefits of blockchain.
Given the properties above, blockchain platforms can bring about profound differences to many industries. Any industry which requires a certain form of accounting, tracking, or data input can greatly benefit from reduced need for manual work, strongly improved security, and fully trustable information. For example, in the finance industry, blockchain can serve as a fully transparent and accessible system of record for regulators. In addition, because of the digitized property of blockchain, the entire lifecycle of a trade is almost immediate rather than the usual “T+3” in the paper-world trading. Furthermore, blockchain databases are built from their own transaction history, meaning that auditing and accounting is simplified greatly. Besides the finance industry, blockchain has widespread implications in countless other areas, such as food safety, data backup, digital voting, supply chain monitoring, payment processing, and many others.
So, what is holding back the widespread adoption of blockchain technology into the relevant industries? A survey done recently by Hyperledger, presented by Brian Behlendorf at the Singapore Fintech Festival 2018, revealed that lack of technical maturity and difficulty of explaining to senior management are two of the major reasons that inhibit adoption by corporate developers. These reasons appear again in the financial service industry. Regulatory and security risks are also some areas of concern.
In the same survey however, Financial Services decision makers see efficiency as a key benefit of blockchain, while Corporate Developers are focused on increased accountability. It is clear that industries believe in the benefits of blockchain, but as of now are afraid of widespread adoption because of the lack of maturity rather than the intrinsic weaknesses with blockchain. This is why despite the current barriers, an overwhelming majority of respondents demonstrated their eagerness to explore the blockchain technology in the same survey.
Blockchain platform technology has in fact already seen adoption in certain areas. In China, the China Citic Bank and China Minsheng Bank have begun adopting Hyperledger Fabric blockchain technology. Supply chains in China have also jumped on the train: ChinaNova launched a rice traceability platform in China using blockchain technology, and currently the blockchain tracks 8% of total rice in China. Visa, a major financial services company, is also preparing its own blockchain service for enterprise payments in Q1 of 2019.
The next big thing is Blockchain Platform. Just like the birth of computers, or the Internet boom, blockchain platforms have the potential to result in widespread change of how people do things across many industries. It offers greatly reduced needs for manual data entry and has provided unparalleled security and trust in data and information. More far reaching implications are to come as large capital is being poured into research in this field. Current concerns are more to do with the lack of technological maturity rather than intrinsic problems with the technology itself. The exciting benefits that Blockchain Platforms bring is certainly going to be revolutionary, if it isn’t already.