Blockchain is the digital, distributed, and decentralized ledger underlying most virtual currencies that's responsible for logging all transactions without the need for a financial intermediary, such as a bank. In other words, it's a new means of transmitting funds and/or logging information.
Why the sudden need for blockchain? Blockchain is the vision of developers who believed that the current banking system had flaws. In particular, they viewed banks acting as third-parties and pilfering transactions fees as unnecessary, and they scoffed at the idea that payment validation and settlement could take up to five business days in cross-border transactions. With blockchain, real-time transactions are a possibility (even across borders), while banks are left out of the equation entirely, presumably reducing transaction fees.
There are other uses for blockchain, too, beyond the currency setting as, for example:
1. Payment processing and money transfers
Arguably the most logical use for blockchain is as a means to expedite the transfer of funds from one party to another. As noted, with banks removed from the equation, and validation of transactions ongoing 24 hours a day, seven days a week, most transactions processed over a blockchain can be settled within a matter of seconds.
2. Monitoring supply chains
Blockchain also comes in particularly handy when it comes to monitoring supply chains. By removing paper-based trails, businesses should be able to pinpoint inefficiencies within their supply chains quickly, as well as locate items in real time. Further, blockchain would allow businesses, and possibly even consumers, to view how products performed from a quality-control perspective as they traveled from their place of origin to the retailer.
4. Digital IDs
More than 1 billion people worldwide face identity challenges. Microsoft is looking to change that. It's creating digital IDs within its Authenticator app -- currently used by millions of people -- which would give users a way to control their digital identities. This would allow folks in impoverished regions to get access to financial services, or start their own business, as an example. Of course, Microsoft's attempts to create a decentralized digital ID are still in the early stages.
5. Digital voting
Worried about voter fraud? Well, worry no more with blockchain technology. Blockchain offers the ability to vote digitally, but it's transparent enough that any regulators would be able to see if something were changed on the network. It combines the ease of digital voting with the immutability (i.e., unchanging nature) of blockchain to make your vote truly count.
6. Medical recordkeeping
The good news is the medical sector has already been moving away from paper for recordkeeping purposes for years. However, blockchain offers even more safety and convenience. In addition to storing patient records, the patient, who possesses the key to access these digital records, would be in control of who gains access to that data. It would be a means of strengthening the HIPAA and other laws that are designed to protect patient privacy.
7. Managing Internet of Things networks
Networking giant Cisco Systems may be behind a blockchain-based application that would monitor Internet of Things (IoT) networks. The IoT describes wirelessly connected devices that can send and receive data. Such an application could determine the trustworthiness of devices on a network -- and continuously do so for devices entering and leaving the network, such as smart cars or smartphones.
(An excerpt from longer text about various uses of blockchain found on
Picture by courtesy of FinMag https://finmag.ir/
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