Usage Areas of Blockchain Technology
With the dramatic increase in the usage of the word Blockchain, people from all around the globe are aware of this term. But what exactly is Blockchain? How does it work? Where did it emerge from? What problems it can solve? How it cannot be hacked and provides trust? Blockchain is a database but a special kind of database. It is a chain of blocks that each block contains information related to the previous block which makes it a chain of blocks. The technique was first introduced in 1991 by researchers. The main goal was to timestamp digital documents, so they were no longer able to be tempered. The logic is simple. Once the item was timestamped, there was no way to change it. This quality provides trust. However, since 2009, nearly no one used this technique. In 2009 Satoshi Nakamoto wrote an article named “Bitcoin: A Peer-to-Peer Electronic Cash System”. In the article, Satoshi Nakamoto created the first digital cryptocurrency, Bitcoin. He used the Blockchain technique to ensure trust between users and eliminate any intermediaries (Nakamoto, Satoshi).
The Technological Structure of the Blockchain
Blockchain is also called a distributed ledger and it's completely open to anyone. Once data is stored in Blockchain, it becomes very difficult to alter it. The reason behind this lies within the blocks. Each block contains data as mentioned above. It also contains its hash and the hash of the previous block. The first block is called the “Genesis Block”. The rest is connected via hashes. Hash is the fingerprint of a block. It is always unique to that specific block. Once someone creates a block and stores data, the hash will be automatically printed. If the data inside is changed, the hash automatically changes which makes it a different block. Since each block has the hash of the previous block and they are connected with hashes, when data is altered, that block is no longer in the blockchain since the subsequent block will not recognize that block. This is the way that makes Blockchain so secure.
Using hashes may not be enough to avert tempering. Today’s computers are extremely fast and can compute hundreds of thousands of hashes per second. What does this mean to the Blockchain? It means that someone can tamper with a block and recalculate the hashes for the rest of the block and making them valid without anyone noticing it. Blockchain technology has a way to allay this. Proof of Work is a mechanism that prevents the creation of new blocks. For example, in a Bitcoin block, it usually takes 10 minutes to create a new block thanks to Proof of Work. If one block tampers a recalculation of PoW for the following blocks is required.
There is one other way that Blockchains secure themselves. As mentioned, they are also called distributed ledgers. Since there is no central entity to control the chain, everyone is a part of it. It uses a Peer-to-Peer network and everyone is welcome. When a new person joins the network, she gets to the full ledger itself. Nodes are the people in the Blockchain. The node can use this to secure that everything is still in order. When a new block is added that block is sent to everyone on the network. Each node verifies the block, and the hashes are connected. If these all check out, the new block is added to the node’s blockchain. All these copies of blockchain create a Consensus. To tamper with a block and make it valid becomes impossible since recalculation of hashes and PoW and having more than 51% of the Consensus to make the blocks valid is impossible.
Usage Areas of Blockchain Technology
Many people talk about direct financial applications when it comes to blockchain technologies. But blockchain technologies are used in many different sectors with different benefits. The technology is expected to be used in almost every area with increasing digitalization in the future. The biggest reason for this, data are recorded and storage more secure. The following describes how blockchain technologies are used in some different sectors (Casino et al., 2019).
1. Financial Applications
The first application that comes to mind when talking about the use of blockchain technologies in the financial sector is known as cryptocurrency. But blockchain technologies are also used in many financial applications, such as digital payments, credit management plans, general banking services, financial audits etc. The use of blockchain technologies in the financial sector provides cost savings in all transactions.
2. Integrity verification
A standout among those the majority of rising blockchain-related fields may be integrity verification. Blockchain integrity verification requisitions store the majority of the data and transactions identified with the formation lifetime for items or managements. Those could reasonably be expected provisions are (i) provenance counterfeit, (ii) insurance (iii) intellectual property (IP) management. Blockchain technologies connect digital content to its creators, allow media recovery and interrogation, allow storage and verification of digital assets, and are used to verify the presence of events recorded in digital formats, such as messages, and video images. it is also used to prevent fraud in the banking and insurance sector. In this way, especially costs are reduced, efficiency is increased, and processing speeds are increased.
3. Governance
The responsibility, robotization and security that blockchain offers for taking care of open records may inevitably discourage debasement and make government management more proficient. In specific, blockchain may serve as a secure communication stage for joining physical, social and commerce foundations in a smart city setting. The World Citizen project is an illustration of a decentralized visa benefit to distinguish citizens all over the world. Blockchain can moreover be utilized for other open managements such as marriage, enlistment, and tax assessment frameworks. Other projects concern thoughts such as a vote-based system where delegates take voting control.
4. IOT
The distributed wireless sensor networks illustrate that blockchain engineering upgrade IoT by limiting its insufficiencies and amplifying its potential. The fundamental idea is to supply secure and auditable information trade in heterogeneous context-aware scenarios with a bounty of interconnected shrewd gadgets.
In addition, working in an automated and decentralized design empowers the network’s high adaptability and productive management. Blockchain interoperability empowers free and secure real-time payment services, upgrading traditional commerce, e-commerce or open and private transportation frameworks.
5. Healthcare management
Blockchain technologies seem to play an essential part within the healthcare industry with a few applications in regions like open healthcare management, longitudinal healthcare records, automated wellbeing claims to settle, online persistent to go, sharing patients’ restorative information etc.
6. Privacy and security
Centralized associations — both open and private — hoard huge amounts of individual and delicate data. Although the GDPR points to control the preparing of this information, there is still a huge hole to cover. Blockchain is considered an opportunity for improving the security viewpoints of enormous information and its versatility when combined with other proficient capacity frameworks that actualize information mining methods.
Transactional security is one of the foremost challenging issues of blockchain advances. In this manner, a few strategies have been proposed to make strides namelessness of blockchains such as blending administrations or zero-knowledge proofs. Within the case of blending managements, the point is to supply value-based protection by exchanging stores from N input addresses to M yield addresses, so that clients maintain a strategic distance from continuously utilizing the same address.
7. Education
Blockchain can unravel issues of defenselessness, security, and protection within the case of omnipresent learning situations and can be utilized for putting away instructive records related to reputational rewards. Teachers include squares into the blockchain putting away the learning accomplishments of understudies. Instructive certificate administration can too be upgraded by blockchain making strides in information security and believing in advanced frameworks, and credit administration. Moreover, blockchain-based applications seem to upgrade the advanced accreditation of individual and scholastic learning. Blockchain-enabled school data centre points might too be set up for collecting, detailing, and dissecting information approximately school frameworks for supporting decision-making. Lastly, within the case of insightful distributing, blockchain can be utilized either for way better-taking care of original copy entries and for conducting appropriate audits in a convenient mould or for original copy confirmation.
8. Data management
Data management is one of the foremost undeniable properties of the blockchain. Usage and applications based on this innovation have not as it was upgraded data management but have moreover encouraged by default suitability since all of their operations are verifiable. Blockchain has the potential to serve as a foundation for cross-organizational workflow administration. Blockchain too disturbs the human asset region, by improving information capacity and determination forms, e.g., auditable candidate determination and verifiable participants’ information. Within the case of secure information conveyance and administration arrangements, propose the utilisation of a decentralized blockchain-based arrangement for metadata supporting key capacities and talk about its suggestions for administration and maintainability of advanced archives. Systems point at overcoming huge information challenges to empower the examination of expansive volumes of exchanges.
9. Miscellaneous applications
This subsection alludes to inquiring about depicting blockchain-based applications that drop exterior the spaces said above. Blockchain can too be utilized to construct shrewdly, secure, disseminated, and independent transport frameworks in smart city settings or to oversee occasion tickets safely. Blockchain is anticipated to play an essential part in natural management. Of specific intrigue are a few IT-oriented blockchain applications like, for illustration, edge computing and the foundation of computational asset sharing frameworks, lattice computing, cloud computing and the utilisation of blockchain as a computer program connector. Blockchain innovation may moreover make strides in social sharing flow.
10. Business and industrial applications
Blockchain applications show up to offer significant execution upgrades and commercialization openings, making strides validity in e-commerce and empowering IoT companies to advance their operations whereas sparing time and fetched. Blockchain-based applications seem to serve as decentralized trade handle administration frameworks for a few endeavours. In such cases, each commerce preparation occasion may be kept up on the blockchain, and the workflow directing can be performed by SCs, in this manner streamlining and mechanizing intra-organizational forms and decreasing has taken a toll.
References:
- Wright, C. S. (2019). Bitcoin: A Peer-to-Peer Electronic Cash System. SSRN Electronic Journal, 1–9. https://doi.org/10.2139/ssrn.3440802
- Casino, F., Dasaklis, T. K., & Patsakis, C. (2019). A systematic literature review of blockchain-based applications: Current status, classification and open issues. Telematics and Informatics, 36(November 2018), 55–81. https://doi.org/10.1016/j.tele.2018.11.006
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