The majority of people is confused and often misuses Blockchain by connecting it only to Bitcoin, but the truth is that Bitcoin is only a case example that brought the spotlight to the Blockchain. To better understand Blockchain we can watch at this technology as an underlying technology that allows the exchange of values, where a cryptocurrency is only a tool that helps us in exchanging these values.
While traditional internet enabled people to exchange and publish content online through websites and social media, Blockchain allows its users to exchange value across the network.
We can watch at a Blockchain as one big ledger that contains records of all transaction that has ever happened in a peer-to-peer network. It is unique because all of these records are decentralized and immutable to changes.
While centralized ledger has stored on one centralized server, Blockchain uses a distributed network of nodes, computers connected to the internet from all around the world who are bookkeeping the ledger in the way that nothing has stored on the Blockchain without previously being approved by the consensus of a majority. Rather than keeping all transactions information in one centralized server, information has distributed around a network of nodes that stores and validates transactions data using cryptography.
There are thousands of independent nodes participating in the creation of the database, verifying each other’s operations and updating the database in the real time.
This way they create a ledger that is censorship resistant, decentralized and secure. On the other side, centralized ledgers are running on one centralized server making the data vulnerable to censorship and data breach.
When the internet has created, it had a goal to connect people with the information and allows everyone to have freedom of speech and express themselves.
There was no central authority, and every computer was independent of each other. If one server wasn't working, users could always dial-up to another server.
Today in order to use the internet, it is required to have ISP, the biggest part of the population uses Google as their browser and there are several social media channels that have overtaken the market. Private data that people leave on these social media networks have exposed to third parties and big companies like Youtube, Facebook, and Twitter who are storing all of these private data on centralized servers, often selling this information to advertisers or politicians. Also, these companies have limited the freedom of speech to its users, so if someone posts a video or publish some message that is against their politics, they will instantly remove it.
In 2018 in a so-called The Facebook-Cambridge Analytica data scandal, Cambridge Analytica used personal data of millions Facebook users without their knowledge to help in a political campaign.
All of this shows us that social media are completely centralized and that there is no such thing as the User Privacy.
The fact that in Blockchain technology everything is decentralized, and that there isn’t any central body that can collect or sells user's private information shows that Blockchain technology is capable of bringing back the ownership of private data to its users while at the same time improves the security of the data itself. Users can use the digital wallet to access and sends theirs transaction data by encrypting it with a private key (user’s unique digital signature).
Currently, the major startup that aims to make a decentralized internet on top of its Blockchain is TRON. It uses proof of stake algorithm for reaching a consensus on the network which gives him the ability to process around 2000 transactions in the second. Its decentralized platform and distributed storage technology will help content creators to remove the middleman and get funded directly by consumers.
Its Blockchain is fast compared to others, but to succeed this project still has to improve its scalability and interoperability. This project set a goal to release the last milestone called Eternity in 2023, so then we'll see if it will succeed.
Bitcoin was the first project that showed how Blockchain Technology has implemented in finance, but there are hundreds of other projects that aim to disrupt various industries by using Blockchain Technology in different ways.
When the developers saw that Blockchain has used for transactions of digital money, they come to the idea to make a similar system, but instead money they have decided to tokenize Real Estate.
By doing this, they are increasing the liquidity of the asset by connecting investors from all over the world with a seller of the property and giving investors the ability to invest in the fraction of asset.
Tokenization of the asset is connecting investors and seller by allowing them to trade without a third party who charges high provision for its services.
Another Blockchain use case that has recently been very popular is the so-called ICOs. ICOs or initial coins offering are the new way for startups to get crowdfunded. There are platforms in the crypto space that allows startups to issue their own tokens on top of platforms native Blockchain. By issuing tokens, startup owners are able to sell tokens that represent the shares of their companies to investors all around the world in exchange for cryptocurrencies.
In 2018, more than $7,852,477,043 has invested through ICOs. In most countries, ICOs hasn't regulated, but highly developed countries like America or Switzerland are working hard on its regulation.
Blockchain technology can also impact the insurance industry a lot. Smart contract platforms can revolutionize the way contracts are made and executed. It can also help insurance companies with fraud detection and prevention thus reducing their costs.
Different types of important government records of public interest are able to be stored on the Blockchain. Land registries are one of the best examples for the application of the technologies. There are already startups in several countries working with governments on putting data on the blockchain.
Blockchain could also help fight corruption by introducing transparency in the way public institutions are working. If speaking about government and other public institutions, we also have to mention the possibility of using blockchain technology for e-voting.
Once the system has put in work, it could become so cheap and simple to organize voting, allowing full transparency, and making it impossible to manipulate the votes at the same time. Recently South Korea has announced that it will test blockchain for e-voting.
There are two types of Blockchains Public Blockchain and Permissioned Blockchain. In a Public Blockchains, anyone can be a node and join the network, and anyone can use the network by having a digital wallet.
Everyone is familiar to this type of Blockchain because popular cryptocurrencies like Bitcoin or Ethereum using this kind of Blockchains.
The second type of Blockchain is called Permissioned Blockchain. This type of Blockchain allows developers to build it in a way that only people with the permission can read the information written on the Blockchain and only ones with the permission can be the node in the network.
In a healthcare system, there is a new trend called ‘Patient-Centered Interoperability’ that will allow patients and providers easier and faster access to their medical records and better quality of care.
However, there are a lot of problems with security and privacy for this type of data sharing.
Permissioned Blockchain can improve interoperability by creating a well-secured platform that can store and share medical data between patients and doctors.
Online data storages are another sector which can be disrupted by the Blockchain technology.
Online data storages are very useful, but because they hold all the data on centralized servers, they are vulnerable to all kind of hack.
In 2012, the most popular company Dropbox was hacked, and hackers stole data from 68 million users.
Blockchain technology can improve the safety of user's data by dividing the data in little fractions (shards) using the sharding process and storing these shards all across the network of thousands of nodes.
This way it’s impossible for hackers to take information and only the owner of the data who has a private key can access the data. There are a couple of projects that have already built decentralized storages such as Storj, Siacoin, and Filecoin.
Public Blockchains are transparent which means that everyone can see every transaction that has ever happened.
Because its transparency, Blockchain is capable of improving management of the supply chains by allowing its user to track product and see the whole history of a product from the time it has created. It will help users and suppliers by revealing product's true origin and by reducing time delays and human mistakes. IBM Blockchain, VeChain, and Wabi are some of the projects that are using Blockchain to improve the management of the supply chain.
List of industries that could be disrupted by the Blockchain technology doesn’t end there. Media, computer science, IoT are some additional examples.
You may hear about Blockchain via Bitcoin, but it is best to treat these like two separate topics. The Blockchain is very powerful and innovative technology that is here to stay, and in a recent future we will definitely see more implementation and use cases in various industries.