5 Industries to be Overhauled by Blockchain

Cryptocurrency is just one use case of blockchain technology; in fact, its applications are limitless. As such, let’s take a look at 5 industries that blockchain will overhaul in the coming years.

Blockchain technology was invented in 2008 by Satoshi Nakamoto and can be simply understood as a ledger of records that is immutable, decentralized and secure.

A blockchain has 4 major components:

1. A distributed network of computers or servers
2. An algorithm responsible for database state management
3. Transactions represent a change in the state of the network
4. A ledger of records or a data structure to store transactions

Each computer or “node” in the distributed network stores its own copy of the records (ledger). The algorithm responsible for state management — the consensus algorithm — ensures data consistency for the ledger on each individual node across the entire network. Transactions conducted bring about changes in the ledger state whilst the ledger is cryptographically secured so that each transaction when grouped together into a block is linked to the previous block making it tamper proof.

Collectively, all the above features are used within a network of nodes with a common book of records which is not controlled by any central authority.

Since its first use case in bitcoin, blockchain technology has been extensively researched by various tech experts around the globe and many have come up with revolutionary ideas of how implement blockchain in other sectors other than cryptocurrencies.

The following are the five industries that blockchain is likely to overhaul:

Banking

Banks are the first institutions that would be affected by blockchain. The current banking system provides facilities like storing their customer's money, transaction settlements, and payments, providing loans, etc. However, problems such as lack of transparency, fairness, and speed disrupt the trust that people have in banks. Moreover, customers gain very little from the banks in comparison to what banks gain from consumers.

According to a study by Accenture, banks can save 20 billion dollars by 2022 if they incorporate blockchain technology.

This is where blockchain can be a solution to these problems. The technology can help banks and customers by creating a frictionless payment system which boosts transparency and speed of exchanges. A system which implements publically available distributed ledger technology (DLT- on what blockchain is based) has no central authority, meaning that banks may not figure in the equation whatsoever, just as there is no intermediary to facilitate transactions on the Bitcoin Blockchain.

Energy

We cannot imagine our world today without electricity, nor we could imagine a world with distributed smart grids. The major sources of electricity are fossils, hydro, nuclear and renewable resources and the energy produced from these resources is supplied to customers via the grid. Currently, the global electricity market as of now is worth $2 trillion dollars and is owned by a few large corporations. This may not sound like a problem, but it raises a few concerns for the authority that regulates and controls the electricity prices. The corporations creating the electricity, significantly alter the prices for greater profits. Evidently, customers are helpless in such a situation and have to agree to those high prices.

Blockchain can solve this problem by creating an open marketplace to sell electricity by using the existing grid. Independent electricity producers who create electricity using a few solar panels can trade it as a commodity over the blockchain for cryptocurrencies.

Once implemented, customers do not have to rely on big corporations and could purchase electricity from a neighbor who is generating solar power surplus to their needs. Blockchain in the energy sector will, therefore, open a

Polling

The polling industry might be the largest that can benefit from blockchain technology. In every election, be it any country or within the private sector, there is news related to the rigging of polls, tampering with votes or hacking of electoral voting machines. A new system is needed which can be trusted and cannot be tampered with.

Blockchain can play a notable role in securing the votes of the public by saving them to a distributed ledger. Blockchain’s immutable nature will ensure that the votes are safe from being tampered with, whilst, being decentralized and open, it will allow anyone to confirm the count of votes.

Blockchain will also allow registration of identities to make it more difficult to forge IDs and masquerade as someone else.

An incorruptible and open election process held on blockchain means voting will become more secure.

Internet

Blockchain will change the internet as we know it.

This seems like an unreasonable statement at first glance but we are gradually moving towards a distributed web, termed popularly as Web 3.0.

The current internet protocol has many problems, namely: censorship, centralization, and efficiency. Http or hypertext transfer protocol is based on a client-server model in which a client receives some data from the server whenever it sends a request to it, in case of a browser the data is generally the website that gets loaded into the browser. The problem with this architecture is that the central server cannot handle more requests than its threshold and this current architecture is inefficient in terms of speed and bandwidth consumption.

Imagine if we wish to access a file located in a server located halfway across the world, accessing such a file would take a few seconds for the browser to load. Also, there is no other way to make sure the file we want to access actually exists and we may get a 404 message instead of the website we want. This leads to wastage of time and energy in accessing a non-existent file. Blockchain can solve this problem by bolstering the idea of a distributed web.

Another innovation, IPFS (interplanetary file system), is a technology that enables users to be part of a distributed web which unlike HTTP, uses a content addressing scheme compared to IP addressing scheme in HTTP. Using content addresses, accessing the data is much faster as the data is retrieved from the closest system which has a copy of it. IPFS, when paired with blockchain, makes content identifiable by a cryptographically generated hash which cannot be altered and is unique. This also allows IPFS to simultaneously host multiple versions of files.

Blockchain plays its part by paying the nodes which host a particular file using cryptocurrency. IPFS also solves the problem of storage in blockchain by allowing users to store large files on IPFS and storing the proof of its existence on the blockchain.

IPFS is not a blockchain, but since they both share the idea of a decentralization, they are a perfect match for each other. Together, IPFS and blockchain can solve the problems with the current web, and furnish to what Tim Berners-Lee envisioned it to be.

Healthcare

Another industry that is in a dire need of an upgrade is healthcare. In most countries, medical services are not streamlined and patients have to go through a lot of trouble until they can get proper care. The great majority of hospitals and doctors still work using paper-based documents instead of digital reports. Not only this is inefficient but patients have to wait in long queues to get treated. One of the solutions to this problem is to store patient data in a database, however, this in is itself presents a problem that the medical sector is facing: the lack of a secure platform to store and share data.

According to a Hyperledger survey, 42.9% of healthcare organizations suppose that the interoperability of electronic health records will help for faster blockchain implementation, with 28.6% of respondents ready to use thе technology today.

Blockchain technology can allow patients to keep their medical records secure and share it only with authorized doctors. Since blockchain uses the concept of smart contracts, which self-executing code stored in the transaction data and run as they are written, we can add a layer of authentication using smart contracts to allow certain people to access our data.

Another property of blockchain that can improve this sector is how it keeps track of all changes in chronological order, allowing doctors that are provided access rights the ability to analyze the entire history of a patient’s record all in one place. Therefore, one can state that blockchain will speed up the diagnosis process whilst also improving patient data security.

The integration of blockchain with healthcare will certainly reduce friction and improve accessibility. However, more research is required to make this technology comprehensible and easy to use.

Conclusion

Blockchain presents numerous possibilities for innovation in the above industries, and there are hundreds of such industries that can implement this technology, however, there are still a few problems such scalability and speed that blockchain itself is struggling with. As this technology develops further, we are likely to see mass adoption of blockchain and a shift in the way businesses around the globe works.

Kashish Khullar is a software developer who fell in love with blockchain and distributed technology on the first sight. He enjoys writing about technology and has been working with blockchain for over a year.

Blockchain Business Review from Apla provides high-quality educational material from the world of blockchain to inform the business community of the competitive advantage that can be gained by integrating distributed ledger data storage within organizations. Our mission is to promote knowledge about blockchain and its uses in both the private and public sector and demonstrate the value of blockchain integration.