Do You Know? Crypto Block Concept was first invented in 1991 by the two scientists – Stuart Haber and W.Scott Stornetta. The idea was based on the need for tamper-proof documents and ledgers. This idea may have been around for ages, but its actual implementation of blockchain – commonly called blockchain was introduced in the year 2008. After a year, Bitcoin has become the first cryptocurrency. Blockchain is not a new concept, but the idea continues to grow in terms of development and application. This concept eliminates central banks, governments and gives control to the users — at least the ones that know what they are doing. But it’s not just fintech; blockchain can also eliminate the game of middlemen in several key areas to bring efficiency, transparency and eliminate corruption at the highest level.
“The apps have gone the Bitcoin way [blockchain-based]. We will see lots of apps adopting decentralised P2P platforms where users and suppliers will get connected without getting controlled by any third party. You will see such P2P startup apps giving Uber and Amazon a run for their money.”
Let’s take a look at some facts about blockchain that make it so appealing to businesses.
#1 Eliminates the Middleman
Blockchain uses the distributed ledger technology (DLT), which means that data is never saved at one place, but across nodes or users. While not all blockchain works this way, nearly all applications of blockchain are pinned on its distributed ledger tech. This keeps every node or user abreast of the developments across the chain. Transactions are recorded in terms of blocks which are added only after a verification and validation process done either through Proof-of-Stake or Proof-of-Work. The blocks once added cannot be removed or modified, which makes blockchain more secure than paper documentation, traditional databases and other options.
This not only eliminates the need for a third-party auditor but also eradicates the possibility of anyone tampering with or manipulating the data. There is a 51% attack possibility where the protocols could be changed, if enough nodes act on it, however, even this is recorded and easily traceable to the nodes that put this in motion.
“Blockchain scores over conventional technology in terms of security, cyber defence, reliability, and scalability.”
All of these at one point or the other needed a middleman or an agent or auditor to fulfil one or the other aspect of the transaction, which introduced layers of corruption or malfeasance or simply mismanagement.
#2 A Blockchain For Every Use-Case
As mentioned above, not all blockchains are decentralised. A blockchain could be public, private, permissioned and/or a combination of these as one protocol could be integrated at the top of another. Consider Facebook’s Libra, for instance. Unlike Bitcoin, and many other cryptocurrencies, Libra, in spite of being based on the Libra blockchain will be controlled and monitored by Libra Association. This association includes Facebook and its member companies who are looking to make profit and not run Libra as a non-profit cryptocurrency such as Bitcoin.
This customization, however, makes blockchain so flexible that the technology is now increasingly used for numerous non-fintech applications as well. To name a few: storing medical records, concluding binding agreements, tracking the flow of goods, storing personal credit records, land registry and even verifying facts in the light of the fake news epidemic.
#3 Governments Turn To Blockchains For Transparency
Amongst the countries that have adopted blockchain-based solutions on a large scale, Estonia is a shining example of how blockchain can bring efficiencies in governance and ease of doing business. Estonia has used the KSI blockchain for various e-governance services. The blockchain is reportedly used in various Estonian digital services such as digital health records, prescription database, judiciary, law & order, banking, business registration, and land registration. And our company, Everus is licensed from Estonia itself.
International organisations including NATO, UN and World Bank have adopted blockchain for various applications such as issuing bonds using blockchain. Leading companies Microsoft and Accenture have teamed up to create a prototype digital identity system for a UN project aimed at providing legal identification to more than 1 Billion people in the world. With this, one’s personal information could easily be shared with service providers and government agencies without compromising how it will be used or telling users clearly whether it has been shared with third-parties.
#4 Confidence Of Business Leaders
In contrast to 84% in 2018, in 2019, 86% of the 1,386 executives who participated in the Deloitte survey from across a lot of countries, believed that blockchain will reach the mainstream eventually. This shows that major business leaders and corporations are looking at blockchain adoption seriously. Naturally, this has a positive ripple effect on smaller businesses as well. In fact, the major question for industry leaders is not whether they should adopt blockchain, but how to make blockchain work for their specific needs. This gives us a sense of a healthy future for blockchain innovation and iteration, and that’s a positive sign for any new technology.