What is Blockchain Technology and Where it is Used
Blockchain technology is a type of distributed ledger technology that records and stores data across a network of computers.
It is used to create, store and update a digital ledger of transactions, contracts, or other records without the need for a central authority.
While blockchain technology is most widely known for being the underlying technology behind the digital cryptocurrency Bitcoin, it’s potential applications are far greater than financial technology.
For example, it can be used to store contracts, health records, identity information, and more.
The underlying principle behind blockchain technology is decentralization and disintermediation.
Decentralization refers to the fact that the blockchain is not controlled by any single entity or organization and allows for distributed ownership of data and information.
This opens opportunities for users to transact directly with each other without the need for a third-party intermediary or payment processor.
Disintermediation describes the removal of a mediator from the transaction, allowing for potentially faster and lower cost transactions.
Uses of Blockchain Technology
Blockchain technology is currently being used in many different industries, with potential far reaching applications in the future.
Supply Chain Management
Blockchain can be used to improve the overall efficiency of supply chains.
Some of the features offered by blockchain technology, such as shared networks and ledger-based record keeping can help supply chain managers to –
- Streamline processes
- Reduce inefficiencies
- Reduce frauds
- Trace the lifecycle of products from start to finish.
Financial Services
Blockchain technology is increasingly being used in financial services.
The technology has the potential to revolutionize the financial industry.
It can reduce the complexity of financial transactions and democratizing access to financial services.
Blockchain technology can be used to facilitate quick and secure transactions between parties.
It reduces the amount of time and cost associated with settlement and reconciliation processes.
This technology also has the potential to reduce fraud and reduce the chances of data being corrupted.
Transactions occur on a time-stamped, immutable ledger, which is distributed across multiple computers.
Additionally, blockchain technology can be used to improve transparency in the financial industry.
Through its distributed ledger system, organizations can easily monitor financial activities and detect anomalies quickly, helping prevent fraud.
Finally, blockchain technology can also be used to improve access to financial services.
Because the technology is digital and can be accessed easily with an internet connection, it can be used to reach previously underserved populations.
Particularly people in developing countries, who may not have access to traditional banking services.
Healthcare
The healthcare industry is currently facing many key challenges which demand the need for disruptive technologies.
Blockchain technology could prove to be a game-changer in the healthcare system by addressing core issues like data privacy, identity management and asset tracking.
The technology has the potential to improve patient data security and integrity.
Its distributed ledger technology is promising to bring accuracy and governance in the healthcare delivery system.
It has the potential to revolutionize and disrupt how healthcare processes work like patient appointment, medical records exchange and billing among other administrative tasks.
Other applications of blockchain technology in health services include –
- Electronic medical records
- Telemedicine and medical data sharing
- Medical research
- Wearable computing and medical devices
- Pharmaceuticals
- Drug supply chain management
- Insurance claims
Data Security
Blockchain technology has been gaining traction in recent years as an effective way to secure data and information systems.
It offers greater data privacy and distributed control.
The technology provides data encryption and authentication that is impossible to alter once recorded.
It also works to ensure the integrity of data by storing a finger print of previous changes in the chain, preventing any unauthorized changes.
This makes it harder for malicious actors to access or tamper with the data, and reduces the risk of hacking and data theft.
Blockchain technology can be used for data security for everything from online transactions to healthcare records.
Real Estate
Blockchain technology is rapidly becoming a popular tool in the real estate sector.
It allows for streamlined, secure, and transparent transactions.
For instance, the technology can help with –
- Contracts
- Title transfers
- Mortgage payments
- Buying and selling property.
Blockchain can also provide fraud protection and verifiable records, making it easier for buyers to know they’re getting a legitimate deal.
Additionally, the technology can help speed up the actual purchase process, making it simpler and quicker.
Blockchain promises to bring transparency and efficiency to the real estate industry in the years to come.
Voting
The potential capability of blockchain technology to simplify and secure the voting process is currently being explored by numerous researchers, organizations, and (in some cases) government entities.
In particular, the distributed ledger system is being considered for its ability to securely and transparently record, store, and transfer data between multiple parties in an incorruptible manner.
Blockchain eliminates the need for a centralized election management body.
The use of blockchain in voting also has the potential to reduce fraud and increase trust in the voting process.
In blockchain, votes are securely and openly stored on the chain, making it impossible to manipulate or reverse any data.
Furthermore, because data entered onto the blockchain is immutable, this could provide a further level of security in the voting process.
It ensures that no vote can be altered or modified, even if hackers or other malicious actors attempt to gain access to the system.
Finally, the decentralized nature of blockchain has the potential to enable individuals around the world to cast their votes quickly, securely, and at low cost.
There is still much research to be conducted and many technical challenges to be overcome before blockchain technology can be implemented on a global scale.
It appears to offer an appealing solution to many of the challenges associated with elections today.
Smart Contracts in Blockchain
Smart contracts are computer programs that can automatically execute a number of tasks or agreements within a blockchain system.
They are commonly used to automate peer-to-peer transactions, lower transaction costs, and create trust between parties.
Using smart contracts, parties are able to make reliable trades without the need for an intermediary.
Smart contracts are programmed to recognize certain conditions and when these conditions are met, the smart contract is automatically executed.
This means that two parties can agree and trust that an arrangement will be respected without having to physically meet or communicate in person.
Smart contracts are often used for a variety of transactions, including finance, legal agreements, insurance, real estate, and more.
Smart contracts are an attractive alternative to traditional legal contracts that require manual work, costs, and can be prone to errors.
With a digital smart contract, the parties, and the conditions, are transparent and all the data is securely stored on a blockchain.
This makes it possible to trust a third party, even if they are unknown.
These contracts are executed only when the conditions are fulfilled, removing a lot of manual work and thereby eliminating disputes.
Regulation and Governance of Blockchain Platforms in India
The Indian government is currently taking an active role in developing regulations and governance for blockchain platforms.
The Ministry of Electronics and Information Technology (MeitY) released a draft policy in July 2019 that seeks to promote trust and transparency in blockchain networks and providing oversight and regulation.
The draft policy defines blockchain as “a data structure which facilitates mutual and irrevocable trust through cryptographic algorithms,”.
It calls for the development of a regulatory and legal framework to investigate and frauds, protect personal data, and promote innovation.
The policy also seeks to develop an appropriate regulatory sandbox to test and deploy blockchain use cases.
It has emphasized the need to form a regulatory body to deal specifically with blockchain technology.
The government wants to ensure that while the economy is taking advantage of the advantages of Blockchain, there should be enough measures taken to counter potential misuse of the technology.
Additionally, the MeitY has proposed the application of the maximum permissible gain-loss limits for the functioning of blockchain networks.
The government has laid out certain guidelines for companies, which are expected to evolve as the technology evolves and advances.
The guidelines include issuing of licenses for –
- Operations
- Maintaining customer due diligence
- Authentication procedures
- Cyber security measures
The guidlines also talk about investing in data protection and management systems.
The government has also laid out guidelines on crypto trading, taxation, and blockchain-based payment systems.
India is also taking steps to recognize blockchain-based digital ledgers, making them legally enforceable.
It is opening doors to the use of smart contracts in various industries.
Overall, the Indian government is taking a supportive stance towards the development and utilization of blockchain technology.
The government is providing basic regulations and guidelines to ensure its use and mitigating any risks associated with it.
It is clear that the government is open to experimentation.
There are regulations in work that will foster the growth of the technology while upholding the public interest.
Privacy Issues
Blockchain technology has been a revolution in the technology space due to its decentralization and trust-less networks.
However, the technology has presented another concern in terms of privacy issues.
In a blockchain network, it enables a public and transparent level of trust, but it may also expose personal data to a greater risk of potential misuse.
Also, because users are identified with their public keys, the anonymity and privacy of users is compromised.
Data immutability is a double-edged sword as it may make user data stored in the blockchain vulnerable in the hands of hackers.
Moreover, as blockchain technology is relatively new, the regulatory frameworks and guidelines surrounding data protection, privacy, and security are still developing and may not provide enough protection.
In order to safeguard data privacy and security, organizations should consider deploying appropriate access control mechanisms, such as permissioned blockchains, and technical measures, such as encryption and anonymization.
Additionally, the development of legal frameworks, such as data protection laws, would help to ensure that personal data remains protected in a trust-less environment.
Top Blockchain Courses
These courses will help learners and developers intersested in blockchain can get an idea of how the technology works.
Blockchain Development Course and Certification Program by Hyperledger – Led by the Linux Foundation, this is an instructor-led online course designed for developers and architects looking to take a comprehensive deep dive into Hyperledger technologies.
The online Blockchain Professional Course by Nucleus Vision – This is a self-paced online course.
It offers participants the opportunity to learn about distributed ledgers & smart contracts, cryptocurrency & blockchain management, blockchain mining & mining algorithms, tokenomics, etc.
Blockchain Basics & Use Cases Course by Udemy – This course provides an introduction to distributed ledgers and the blockchain technology.
It takes learners through a series of lessons and exercises, ranging from basic concepts to the different available use cases.
Blockchain Certification Training by Edureka – In this training, experts teach the fundamentals of blockchain technology, including its applications, cryptocurrency, smart contract.
They also teach about various frameworks like Hyperledger, Ethereum, Ripple and MultiChain.
Blockchain & Bitcoin Fundamentals by Udacity – This course introduces learners to blockchain technology, cryptocurrency, and the wide variety of applications that blockchain has to offer.
It covers all the basics, from technical concepts to principles to real-world applications.
Blockchain Strategist Certification by Oxford Home Study Centre – This is a comprehensive online blockchain strategists course designed to equip students with the knowledge and skills required to become an effective blockchain strategist.
Blockchain for Business Professionals by Coursera – This course is designed for business professionals looking to gain an in-depth understanding of blockchain technology and its applications in the enterprise.
It provides an overview of blockchain, industry trends, and the various use cases it enables.