In very simple terms, a blockchain system is a database of information that can be public or private. It’s different from conventional database systems in multiple ways.
First, blockchain is decentralized and maintained by a group of verified users. These users usually have to put some skin in the game to guarantee they will behave in favor of the system when verifying the information that enters the database.
This guarantee can be in the form of expensive machines and maintenance fees in Proof-of-Work (PoW) systems or investments in a specific token’s market in Proof-of-Stake (PoS) networks.
Every member will be able to hold a copy of the database called the blockchain ledger. They use their own copy of the ledger to verify new transactions and ensure that they are valid. This is a very powerful feature of blockchain systems as it removes the single point of failure.
To perform a successful attack, the attacker needs to change a single record in the copies held by more than 50% of the members. This makes an attack on a huge blockchain system like Bitcoin quite expensive and almost impossible. This is why we call blockchain immutable which makes it highly secure.
Transparency is another important feature of blockchain technology. Every member will be able to view the records of transactions on public blockchains while on private blockchains, these records are accessible by specific members.
The mechanism of blockchain technology allows different organizations and technologies to be able to work in a trustless manner as everything is recorded securely on the blockchain ledger. No party can change the recorded data by themselves, making it reliable.
By using blockchain technology, business partners won’t need to trust each other and can rely on the secure, transparent, and decentralized nature of this technology.
Now, let’s see what industries are actively using blockchain technology in their workflow or are exploring their options to implement it in the future.
By using blockchain, electronic health records will be recorded in a decentralized and secure manner with patients actually having a role in who can access their records. This makes the transfer of health records quite easier and more secure between different health entities.
The transparency and immutability of blockchain systems also make them suitable for keeping records of clinical trials, ensuring the integrity of the results. These features also are quite valuable in the supply chain management of healthcare and pharmaceutical products.
By using blockchain technology, each product will be traceable from its origin to its destination, helping the sector in its fight against fake products which can have detrimental consequences. This type of verification can also be extended to healthcare workers and staff, ensuring that their credentials are legit and authentic.
Just like the healthcare sector, blockchain can be leveraged in real estate for managing properties.
From construction records to the history of owners and title deeds, any documents related to a property or land can be stored and shared securely on a blockchain system. This removes the burden of authenticating each document thanks to the unique features of blockchain technology.
Another exciting use case that blockchain technology brings to the table is tokenization. Tokenization refers to storing any real-life asset on a blockchain system. But, what does it really mean?
Once a property is stored on a blockchain system, its ownership can be managed through blockchain tokens. These tokens can be divided into fractions, allowing for multiple parties to own a single property based on their financial capacity.
Blockchain technology is affecting the real estate market in yet another way. Non-fungible tokens or NFTs are unique blockchain-based assets that their rarity and uniqueness make them valuable.
After the popularity of NFTs and the metaverse, different projects started integrating these two, creating virtual worlds that offered unique assets in the form of NFTs. Some of these metaverses were created based on the real world, allowing property owners to own the NFT version of their property in the metaverse as well.
This is probably the most popular and tangible use case of blockchain technology. You most probably cannot know blockchain technology without hearing about Bitcoin and cryptocurrencies first.
Although blockchain is quite older than Bitcoin, the technology became popular after the largest cryptocurrency in the world used it as its foundation.
Bitcoin was created to offer an alternative to the traditional financial system, providing a borderless, cheap, and accessible form of money to people all around the world, specifically the unbanked population.
After Bitcoin, blockchain systems like Ethereum tried to offer novel financial products such as loans on blockchain systems alongside borderless and affordable transfers.
The collection of blockchain-based financial products is known as Decentralized Finance or DeFi. The DeFi section mostly works with smart contracts, a set of rules and conditions that would automatically initiate an action once met.
Decentralized Exchanges (DEXs), for instance, will allow you to trade blockchain-based assets directly with other users. Smart contracts will facilitate the transaction between you and the other party based on some predefined rules.
For example, if you are the buyer and have enough funds in your digital wallet, the smart contract will have the asset transferred to you automatically on blockchain and the seller will receive the funds.
Decentralized governance is probably the most well-known use case of blockchain technology here which is usually implemented through Decentralized Autonomous Organizations or DAOs.
With DAOs, community members will be able to submit proposals and vote on them based on the voting powers they have. This voting power is determined according to various criteria such as their investment, engagement, and royalty.
If implemented properly, blockchain-based elections can have the level of transparency missing in today’s elections.
Blockchain can also serve as the decentralized database for government documents and records, providing a secure and transparent way of storing important information. With blockchain, different government agencies can share documents in a seamless and secure manner, saving time by removing all the required paperwork.
The retail section can greatly benefit from blockchain technology. From inventory to logistics and authenticity checks, blockchain can be integrated into every aspect of a product’s life.
By providing a transparent and decentralized network, all parties involved in a product’s journey such as manufacturers, distributors, shipping companies, and end users and customers can have real-time access to all the data available. This offers great traceability to everyone, allowing them to save time, energy, and money.
The immutability of blockchain records, on the other hand, adds another value to the retail industry. It will allow customers to verify the authenticity of their products, specifically the luxurious ones, by going through the product’s journey from its origin till they reached their destination.