Blockchain technology can be used in many different industries, ranging from banking and accounting to the entertainment industry.
Firstly What is Blockchain?
In a simple way, it's a database, an ever-growing database of different kinds of data and it has quite remarkable properties:
Once data is stored in the database, it can never be modified or deleted. Every record on a blockchain is permanent for eternity.
Blockchains are made up of a series of individual blocks. Each block contains information about transactions conducted within a given time period. They also contain a unique identifier to differentiate them from every other block in the chain.
Blockchains are decentralized records. Instead of being stored in one central location, the blockchain is stored on the computers of every user of that given blockchain.
Meanwhile, the unique block identifier - known as the hash - is derived from the information contained in every previous block in the blockchain. This means that, in order to falsify any record on the blockchain, a nefarious actor would have to change every block on every instance of the blockchain. As a result, blockchains are considered to be virtually unfalsifiable and are thought of as immutable records of transactions.
Today, most blockchains are public. This includes prominent cryptocurrencies such as Bitcoin and
Ethereum. Anybody can view records of transactions conducted on a given blockchain, using a tool called a block explorer. Theoretically, however, blockchains afford a high level of anonymity to users.
While public blockchains are the norm, private versions are also being explored as a solution for many business and government use cases.
Lets us share with you what we discovered in our little research: four different ways blockchain will affect your company in the nearest future.
Impact of Blockchain Technology on Business
1. Contracts
Anything called business will definitely be engaged in contracts. Glenn Danzig says "Until the contract is signed, nothing is real". Blockchain will have a large impact on the way other organizations engage with one another. Doing business means transacting with other parties to facilitate something that wouldn't be possible alone. In such an arrangement, the two organizations need to be sure they can trust each other.
In 2017, This trust is given by a set of pages or contracts, that lists all the terms and conditions of engagement. When a party doesn't stick to promises mentioned in the contract it can be enforced by law- but this can result in an expensive and timely process. So in many cases, people go to court over a breach of contract but isn't worth the trouble.
So using blockchain technology, many of these contracts can be converted into Smart Contracts. Unlike traditional contracts, smart contracts consist of software code and are carried out by the blockchain network. The beauty of these smart contracts is that they cannot be altered after they are deployed, which ensures neither party in a deal can walk away without doing their part.
Smart contracts, written in code on the blockchain, are contracts that are completely inalterable once they have been triggered.
Imagine you're in a band and you want to sell your music to someone, meaning you'll have to transfer an audio file. How can you be sure the buyer will pay for it after receiving it? At the same time, the buyer might be sceptical too, thinking you won't send the audio file if they make the payment first. A smart contract ensures that once the buyer has transferred the money, the audio file will immediately be sent to the buyer. Once deployed, no one can stop the contract from being executed. So both parties can trust the code.
One of the biggest promises of blockchain is that it will replace money someday. This would entail such a radical shift that it would take years, if not decades to happen. But right now we can already use blockchain to transfer money across the globe within minutes, instead of days.
One of the benefits of decentralized money is that payments can be transferred directly between peers, without intermediaries, like banks, slowing down the process. Given this, cross-border remittances will no doubt be another area of your business that will adopt blockchain.
If you have a business, there are chances that you have company data stored in the cloud. According to a recent report by cloud services provider BCSG, a growing number of small and medium-sized companies are turning to cloud computing. Currently, 64% of small business owners have an average of three cloud solutions in place, which is expected to increase to 72% in the next three years.
Blockchains are playing a huge role in decentralizing cloud storage because they allow strangers to collaborate with each other. Instead of storing files on a single centralized server, you'll be able to save your files on thousands of devices across the globe.
This is how it works: Every file you upload will be divided into several tiny chunks, each of which will be stored in several devices in the network. Which particular chunks are stored on which particular device is recorded on the blockchain? If you need to retrieve that file, the system will assemble it for you based on this information.
Your data will be even more secure in decentralized storage than in cloud storage. While the centralized cloud storage stores your file on several backups, the decentralized storage will keep your data on a bigger number of devices, therefore, increasing dependability.
Also, in centralized systems, the strength of the system depends on how secure one company's servers are. Using decentralized networks, there isn't just one device that contains the complete file, which makes it practically impossible for hackers to obtain the data.
4. Less hierarchy, better governance
Companies will thrive in an environment where power is not limited to the hands of a few, yet this is the way organizations are often structured. These current authority structures are the result of inefficiencies in coordinating a large crowd.
Blockchain itself is not a new technology- it is just a combination of technologies that we've had for several decades: peer-to-peer networks and cryptography. Similarly, the solutions on top of blockchains are made up of several moving parts that work together beautifully.
Using a combination of smart contracts on top of the blockchain, communities can have governance without a hierarchy. It's very likely that your business will soon have next to zero bureaucracy as a whole and might be taken through a transparent voting process that gets carried out on a blockchain.
Every proposal gets submitted as a Smart Contract on which everyone can vote. If the threshold defined in the company's constitution is met, the proposal is approved and further steps can be taken.
These are the few areas that your business might adopt blockchains sooner than you expect, but the possibilities are endless.
Comments
Post a Comment