Now that blockchain technology is better understood, global industries are finally taking it seriously. Organizations all over the world are integrating blockchains into their internal processes to boost efficiency and security.
What is it about blockchain technology that makes it so attractive? Amid the digital age, vulnerabilities in societal infrastructure have revealed a need for fundamental change. Below is an overview of four major problems that blockchain technology can solve in the coming years.
1. Cross-border payments
Traditionally, sending payments to someone in another country involves using a middleman service to facilitate the transaction. Companies like Western Union and MoneyGram are popular choices for this type of service. In order to send money over borders, people are subject to high fees and a waiting period of several days for the transfer to settle.
Situations that require timeliness, such as sending money to family members in an emergency, are bottlenecked by traditional cross-border payment services. Moreover, added fees and potential errors in personal info create an extra pain-point for people.
With blockchains, these constraints are lessened by utilizing tokens — otherwise known as cryptocurrencies — to facilitate transactions. Not only can these transactions settle instantaneously, but the omission of middlemen in these scenarios substantially reduces fees.
Elections have been historically wrought with problems. These include voter fraud, accessibility, and hacking. No country has solved these problems yet, and democracy is continually at risk because of them. But blockchains offer solutions to each of these problems thanks to their fundamental security features and digital nature.
Voter identity verified by blockchains can tackle voter fraud, reducing the chance that someone will flood voting systems with false counts. Furthermore, providing an easy-to-use digital interface built on top of a blockchain can address low voter turnout. Younger voters accustomed to the conveniences of modern technology can better involve themselves in the election process.
And finally, the tamper-proof nature of cryptographically enhanced voting systems will reduce the chance of hackers interfering with elections. Currently, voting systems produced and distributed by centralized companies may leave inadvertent backdoors in the software.
Blockchain technology can optimize the overall security of several important industries. Individual “blocks” on a blockchain are cryptographically encrypted containers of information, making them perfect for storing sensitive data. Immutability is the term used to describe the unalterability of blockchain data.
Sectors that can greatly benefit from the security of blockchains are charities & fundraisers, health care systems, and supply chains. Each of these sectors requires the need for the tracking of assets and the protection of data. Supply chains have arguably the best use case for blockchain, considering their primary purpose involves item-tracking. Likewise, charities and fundraisers — which have been plagued with scandals throughout history — can use the traceability of blockchains to ensure proper use of donated funds.
As far as health care goes, patients with data on a blockchain may be endowed with the ability to manage how that data is used. Aside from medical facilities, other health-based companies seek patient data for research and for-profit services. Granting patients control over who is able to access their data provides a huge improvement to data privacy. There is even the possibility for patients to obtain some sort of payment for allowing certain entities to use their health data.
Determining whether an asset is authentic has far-reaching benefits for those in the arts and entertainment industries, or for those with copyright concerns. In the digital age especially, it’s far too easy to duplicate, pirate, and disseminate work without proper attribution to the creator. And aside from intellectual property, blockchain also opens up new possibilities for digital collectibles.
Integrating any sort of creative asset with a blockchain automatically generates authenticity, as each block on a blockchain is unique and unalterable. Applications built on blockchains can use this characteristic of authenticity to produce one-of-a-kind objects that can be forever tracked online. Video games are a great use case for this. Developers can create custom items that gamers then collect, and potentially trade.
Additionally, matters of intellectual property in patents and creative works can be accurately and efficiently managed via blockchain technology. For example, “smart contracts,” which are important products of blockchain programming, allow for the automatic fulfillment of agreements between multiple parties involved in some sort of transaction. Smart contracts have many use cases. For intellectual property, everyone involved in a given creative project can be compensated appropriately upon its completion and distribution.
The above overview of problems that blockchain developers seek to solve only scratches the surface of what’s possible. Dozens of blockchain-centric startups spring up every year offering solutions to everyday problems. Even some of the biggest companies in existence today, such as Amazon and Facebook, are finding ways to integrate blockchain into their business models. All of these companies see the above-mentioned problems as the most glaring technology issues in society today.
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Still hazy on what exactly blockchains are? Read this article to learn the differences between blockchains and cryptocurrencies.