Why Blockchain is More Than Just a Mean to Get Rich
Blockchain is the most significant invention since the Internet and electricity. It is a market-changing technology that makes many processes easier and 100% secure. Despite the global spread, blockchain is still on the early stage of development. It was invented only 10 years ago which is not enough for being completely understood and adopted. So we are now witnessing unknown possibilities of blockchain being discovered.
Blockchain, or a distributed ledger, has become “famous” as a technology devised for cryptocurrency—digital money. The great thing about blockchain is that because it is a decentralized and self-controlled ledger, there is no need to pay and trust intermediaries. That saves time, money, and guarantees the transparency of all operations. Thanks to these features blockchain can be used in banking, contract compliance, online security, data management, real estate recording—and that’s not even 10% of all areas which blockchain can improve the overall level of safety and trust. New industries are constantly added to the list, as new possibilities of the distributed ledger are found. Today we want to review 3 main use cases of blockchain technology:
Document storage is the key issue for almost any enterprise. Secure management of documents is not only difficult, but also expensive and time-consuming process. Distributed and open blockchain technology solves such problems. Banks, universities, healthcare institutions and many more others will spend less time, cost and effort on managing the documents with the implementation of a digital distributed ledger.
When a document is certified in the blockchain, it gets a cryptographic hash. Hash represents the content of this specific document. When the same document is submitted, the marker will be the same, and the verification approved. But even if one letter in the document was changed, markers won’t match, and the network won’t verify the document. Using the blockchain, owners of the document can prove that they have an authentic copy. If there are any forgeries, they will be shown on the ledger as a separate block. Blockchain eliminates the possibility that the changed document will be verified.
There are public and private blockchains, and both can be used for document verification. Public ledgers are open for everybody, while in private ones only a certain number of companies can participate. Transparency, simplicity and low cost make blockchain a perfect solution for document storage and verification.
With blockchain you can prove that a certain document existed in a specific form at a specific point of time. No more disputes about when the document was created and whether it was authentic. Blockchain is the fairest judge, that always says the truth and can’t be bribed.
More and more enterprises start to consider blockchain as a solution for document verification. For example, multinational PC company Lenovo plans to use blockchain to verify the validity of physical documents. The company aims to utilize digital signatures that encode physical documents. Then they are processed by the computer to get verified.
Blockchain technology gifted us a smart contract. It is a contract, that is validated only when certain conditions are met. It executes exactly as it was set up and can’t be changed. Smart contracts keep track of agreement conditions and automate steps towards fulfillment of terms. If one step is missed, the network won’t execute the contract. Hence, another name for smart contracts—self-executing contracts. They can be used to exchange any kind of asset or value in a conflict-free way with no need to trust the third party. Smart contracts can be compared to vending machines—you won’t get a candy until you put in a coin.
The idea of contracts that eliminate the possibility of fraud or tamper, was born even before лthe invention of Blockchain. The term was coined in 1994 by Nick Szabo (who is, by the way, “suspected” to be Satoshi Nakamoto according to the New York Times). He explained smart contracts as “a set of promises, specified in digital form, including protocols within which the parties perform on these promises”. But only after the creation of blockchain the idea of smart contracts got a tool for implementation.
Smart contracts’ potential is unlimited. They can be used not only for simple buy-sell transactions but perform operations in legal processes, crowdfunding agreements, insurance policy. For example, service Bonpay uses blockchain and smart contracts to ensure the security of customers’ funds kept in cryptowallets. Smart contracts also can be used for multi-signature accounts, so funds can be shifted only when a certain number of people agree.
People pay lawyers enormous sums of money to perform routine processes, which can be automated with smart contracts. Such contracts take the responsibility of automating processes and their real-time audit.
In our digital society, problem of security breaches and data leaks is huge. Ensuring privacy of the data is issue number one not only for enterprises but for individuals as well.
Blockchain is a perfect distributed storage for high volumes of data. It records and stores information in a safe, transparent and resistant to outages way. Most cloud-based storages are centralized, which makes them vulnerable to hacking. Whole network will be under the risk if the main system suffers, for example, from the power outage. It divides data into blocks and encrypts it so no third party can access it. Then files are distributed in the decentralized network. The data cloud is shared among all the participants of the network, but no one can interfere in your files, privacy is guaranteed. Blockchain is immutable, so you know if the file is authentic or altered.
Blockchain-based data storage is not owned and controlled by one company. It offers more secure and efficient solution for keeping and managing information. Data is end-to-end encrypted, and only you can have access to it.
There are projects that already provide services for storing information on blockchain. Storj, for example, not only performs the function of a decentralized data storage but also offers users to earn extra money by rent out extra space on their hard drive.
Decentralization is marching across the market. Blockchain can and must be used where immutable records are needed. Operations performed on blockchain are safe from tampering.
There is no need to trust third intermediaries—mutually untrusting users can exchange value without worrying about compliance, but…
Is blockchain “one-size-fits-all”?
No. The technology is great, and can be used in many areas, but there is no need to use blockchain everywhere. Sometimes projects draw the attention of investors by simply putting the word “blockchain” to their name. For example, Long Island Iced Tea company suddenly decided to change to Long Blockchain Corp. and announced that it will start to invest in companies that develop decentralized ledgers. Shares of the corporations immediately soared by 289%.
Also, there are projects that decide to use blockchain just because they heard so much about the technology. They believe it will magically bring their business to the next, higher level. Some of them will certainly fail just because they used blockchain where they didn’t need to. If you are an owner of a small bakery, you don’t need to implement distributed ledger to count how many cakes were baked yesterday. Classical ledger or Excel graph will be an excellent solution for you.
Blockchain is still expensive and difficult to implement technology. It is efficient for big-scale industries but can be disruptive for small start-ups. Maybe in future, after the years of development and improvement blockchain will become an easy-to-install app, but nowadays you have to think twice before using it.
There is an opinion that blockchain will never be adopted because most people don’t understand how it works. Yes, for non-tech-savvy people it’s almost impossible to understand the principles of blockchain, and even for tech-savvy it’s not an easy task. But users don’t need to understand how the technology works. We use cars, coffee-making machines, smartphones every day. Do people know technical details of these devices? No. But it doesn’t prevent them from using it. Blockchain is similar—difficult to understand, difficult to implement, but totally worth it.
And if you already felt all the advantages of blockchain by using cryptocurrency,then you certainly are looking for a secure way to store your funds. We want to offer you Bonpay—cryptowallet, where you can store, receive and send your digital coins without worrying about their safety. Also at the beginning of the summer Bonpay starts issuing of cards that convert cryptocurrency into fiat money instantly. It allows you to use crypto everywhere fiat is accepted. Register a wallet and feel the financial freedom with Bonpay!