Blockchain 101: Everything you need to know about blockchain

It is starting to look like there is a new buzzword in the tech community every other week. That’s understandable as it’s a reflection of how fast innovation is happening incredibly fast, now not just innovation; everything is happening at an impressive speed these days, and the world is looking for ways to speed it up even more. Thanks to the pandemic.

Blockchain technology gained popularity because of three main things

• Immutability
• Decentralized operations
• Digital record of all transaction

Blockchain technology describes technology that Developers use to build blockchains. A typical application of this technology and arguably the use case that gave rise to the blockchain trend is cryptocurrencies (Bitcoin, Ethereum, Doge, E.T.C.) so, blockchains is a ledger system that compiles information that has been saved in blocks and stores them online throughout a distributed network. As the name implies, blockchains are literally “a chain of blocks” containing information. Since these blocks are stacked upon each other, their previous history can”t be changed- Immutable.

Let’s look at how blockchain is changing the world

Transactions are performed and updated in real-time. Blockchains are distributed ledger accounts, and nodes in a network update each other constantly when new blocks are added to it. i.e., for each transaction or record, all previous blocks are informed. This gives little room for changes in previous transactions and keeps an accurate record. It also allows users to build fast processing payment options in banking and other financial industries.

Blockchain transactions eliminate the need for a third party. This eliminates third-party fees and makes blockchain transactions cheaper than transactions that are carried out by other financial institutions. It also provides a way for the citizens of the world who are currently unbanked to have access to secure transactions.

Another way blockchain is changing the world is the emergence and sustained growth of decentralized currencies. These currencies like bitcoin and ethereum are not regulated by the government. They operate in a free trading zone and are secure. Cryptocurrency transactions have no way of being altered from one side. If it were to be hacked, the perpetrator would need to have access to more than one copy of the ledger else they stand a risk of raising suspicions. Having access to multiple sides of the ledger is an almost impossible task. To alter a blockchain history, an attacker would need to have access to more than half of the blockchain network before their version is accepted. The ledgers are publicly available making blockchain the most transparent mode of performing transactions. It provides room for accountability as anybody can look up the history of transactions of companies or organizations.

Blockchain technology is being used by individuals and corporate entities to create digital identities. These identities contain all personal information required to either log into various sites or to perform transactions. These digital identities are encrypted and are unique. It takes away the need for multiple passwords across various sites.

Contracts, lease agreements, or every other type of negotiation that needs both parties to fulfill different sides of the agreement can now be performed using blockchain technology. When one party defaults there is an immediate refund to the other party. Automating the type of negotiations takes away the stress that comes with dealing with fraudulent parties.

Here are some industries where blockchain technology can improve operations.

Blockchain technology is one of those technologies whose use cases seem endless. Many industries stand to benefit from having decentralized networks. In this survey from Deloitte on the adoption of blockchain in 2020, they pointed out how the occurrence of the pandemic highlighted many data security issues many industries had been facing previously and how it was a driving factor for the adoption of blockchain. Today, the industry with the highest adoption of blockchain technology is the financial industry, with digital currency constituting 33% of the overall blockchain technology in use. This figure is closely followed by data access and sharing with 32% and data reconciliation with 31%.

Image source:51 Critical Blockchain Statistics: 2021 Data Analysis & Market Share — Financesonline.com

In the health sector, investors have adopted blockchain technology, driving the estimated value of blockchain in health care to get up to $150 million in 2025. By using blockchain technology, patients’ records can be stored independently and easily retrieved in cases of emergency across different networks. In cases of virus attacks, data can easily be retrieved due to the decentralized nature of blockchain. When patients need to change hospitals across the globe, they can retrieve their medical records using a device connected to the internet.

Pharmaceutical companies can keep track of the drugs they manufacture and supply using blockchain. The exact location and storage condition of drugs can be stored on a network and since blockchains are immutable they can be tracked. This tracking system would provide adequate information that can help determine if a drug at a particular location is authentic.

In a report from the people at the World Economic Forum, WEF, they noted five instances in which blockchain technology can positively impact governance. The use case ranged from government contracting to disbursement of grants. In the article, the writer discussed how blockchain can lend credibility to voting processes by minimizing election tampering using immutable, transparent, and encrypted technology.

The financial industry is already witnessing the biggest blockchain-related change. Payments processing, and other factors we have earlier discussed. NFTs are one piece of evidence of how blockchain technology is changing the intellectual property space. Creators are using this immutable technology to protect their ideas and receive credit for their work. Blockchain has the potential to disrupt many industries, it provides solutions for speed, security, and encryption. As the future unfolds, we would see how effectively this would play out.

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