Blockchain: What is it and how it can disrupt your business
The word disruption seems to be brandished in almost every sentence in the startup world but what does it really mean? In its simplest terms, it relates to a monumental change in an industry which results in something new or innovative being created. Although most businesses fear any type of disruption, it is a disruption that creates and drives progress.
So it's little surprise that when the financial market became disrupted in the financial crash of 2008, it became evidently clear that the systems and process in place were no longer working. Too much power had been accumulated in the hands of too few. And when this power is abused, it causes mass ripples in the marketplace and gave birth to the rise of the FinTech industry as large well-known banks fell to the wayside.
It is at this time that bitcoin was born as an answer to disrupting the broken financial system. And with the birth of Bitcoin came the Blockchain.
Ten years on the terms bitcoin and blockchain are slowly creeping into everyday language but what exactly is it?
According to Andreas Antonopoulos, a leading expert in blockchain:
‘Bitcoin is the original technology that uses a data structure called the Blockchain as one of its underlying components. It uses that in order to achieve certain properties, and these properties are decentralization, censorship resistance, borderless operation, neutrality, and openness. ‘’
Or in other words, the blockchain is a way of storing a continuously growing list of data. This data is verified by multiple different and independent computers on the network where no one party or person controls it.
What is a blockchain?
The blockchain is a shared (or distributed) ledger, where every transaction is a block, locked in chronological order and secured by cryptography.
The transactions registered on the blockchain are very difficult to change as changing one transaction would require changing the whole chain. This is known as immutability.
Transactions on the blockchain are agreed via a consensus mechanism between the computer nodes (the peers across the network) on which transactions are valid. Only once a consensus is reached will the block of data be registered on the chain.
The transactions on the blockchain are self-executing via smart contracts. These are essentially a set of instructions (or agreements) that are triggered automatically that can be coded on a blockchain. For example, a smart contract could be coded to transfer money or deliver a product or service. Smart contracts remove the need for middlemen (and lawyers!). In fact, the concept of smart contracts was invented in 1994 by Nick Szabo, a legal scholar, and cryptographer,
The blockchain uses a hash function. This means it can turn data of any size into a fixed size. Transactions are thus registered in a hash format.
Blockchain technology also uses public key cryptography. This is where the public key allows others to view transactions by you, and the secret key (private key) gives you access to your assets on the blockchain.
What does blockchain mean for my business?
Due to the way the blockchain processes and transacts data, it can create many benefits for businesses such as:
- Self- executing agreements (via Smart Contracts) between parties for each transaction would remove the need for middlemen and lawyers
- Real-time data that is stored on every computer on the network. No centralized party owns the data
- Data that cannot be tampered with (immutable)
- Transparent and clear audit trails
- Efficient processes that cost less, thanks to streamlining in supply chains and payments
What industries can blockchain disrupt?
Let's take a look at how the blockchain can impact the below industries
Banking and Fintech
Faster and secure transactions when processing payment
Lower friction cost to moving money as the middlemen are removed
Cross-border global payments become faster and easier
Greater security as data storage shift from a centralized to a decentralized network
The ability to crowdsource cloud storage
Lower transaction costs within a decentralized network
No Single Point of Failure and Increased data integrity
Charity and Volunteer
Provide auditable trail for donations to prevent fraud
Ensure the funds are going to the people who need it
Digitizing and verifying donor and charity credentials
Government and Voting
Reduce voter fraud with verifiable audit trails
Increase accountability and compliance for government officials
Identity validation and integrity of citizen registry data
Supply chain management for drugs and the authentication of drugs
Recording and sharing Patient Databases with the right parties to help patients get the best treatment they need
Privacy and ownership of patient health data
Reduce paperwork by digitizing transactional processes
Record, track, transfer land titles and Verify property information,
Travel and Security
Faster and trusted Passenger Identification process
Boarding, passport, and payment digitized and verified
Loyalty programs digitization and tracking
These are just some of the industries that can be disrupted by the use of blockchain. Not all business cases will be relevant but it's worth taking a look at your industry and asking if there is any scope for embracing blockchain technology to make things better.
Written by Sukhi Jutla
Sukhi Jutla is the author of 3 books and the co-founder of MarketOrders, the online B2B marketplace for gold jewelry and diamonds. As a female tech ambassador, Sukhi is a regular keynote speaker, passionate about supporting female entrepreneurship. She is an IBM Blockchain Foundation Developer and her efforts have been recognized by a number of industry awards including the Asian Women of Achievement Awards, WeAreTheCity Rising Stars Award, Management Todays ’35 Women Under 35′ and listed as one of the Top 100 Asians in UK Tech. In April 2018 Sukhi made global headlines when she became the World’s First #1 Bestselling ‘Blockchain’ Author.
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