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The internet is an important tool every human being needs. Our world moves faster as time passes. For some, the internet has helped us move with it. Others would argue that the internet was the catalyst of this change. The transfer of digital data has become instant and paperless yet recorded. You may then ask yourself how these transferred data are secured and documented for proof of transactions and how transactions get recorded on a blockchain. For this, you need the answer to the question: what is blockchain technology?
What Is Blockchain Technology?
Blockchain technology was introduced in October 2008 as part of the creation of a cryptocurrency called Bitcoin. The creation of Bitcoin as a form of legal tender required a method that would avoid using a central banking authority that controls, monitors, and potentially manipulates its value, the transfer of funds, and transactions.
Bitcoin is the first cryptocurrency and has the largest market capitalization among its digital currency peers. Bitcoin transactions are validated through the process of bitcoin mining. The information is then added to the blockchain ledger once a transaction is validated in the bitcoin network. Bitcoin mining also introduces new bitcoins into market circulation.
The term “Blockchain” sounds complicated, much like several technical terms. Blockchain technology is also known as distributed ledger technology or DLT. The network records and maintains encrypted information with the use of cryptography to secure its privacy and keep the data safe from being altered, hacked, or stolen. If it had a physical form, a blockchain would be a number of boxes with data connected by chains. Think of it as a group of computers acting as ledgers or receipts that prove you created a document or transaction. It is difficult for malicious entities to hack into the network and access or change the information in the blockchain since there is more than one computer with the same data.
Blockchain uses cryptographic techniques to secure data housed within. These include the use of E2EE (end-to-end encryption), asymmetric encryption, and MFA (multi-factor authentication), among others.
Examples of Blockchain Technology Use Cases
Blockchain has several uses in different fields and industries. You might use blockchain in a wide range of methods for personal or corporate purposes.
Blockchain in Money Transfer
Blockchain technology has been widely used for money transfers and digital currency transactions since its introduction in 2009. Blockchain is especially popular when it comes to financial services.. You have probably done a money transfer online from your bank or a digital wallet and remitted money to a seller for the purchase of items. The transfer of funds online has no paper records, but the data is stored, and transaction confirmation is sent to both parties. This is an example of where blockchain is applied.
Blockchain in Healthcare
Time is precious when seeking medical assistance, especially in emergency situations — this is where blockchain is useful. Hospitals, physicians, and laboratories can now record, share, and access medical records faster with the help of blockchain. Your information can be easily shared and accessed by physicians so they can diagnose your ailments quicker and come up with the best treatment possible. Pharmacies may also benefit from blockchain technology to ensure that the medicine type and dosage they give the patients are correct. This ensures the prescription comes directly from the attending physician to avoid confusion or falsification.
Logistics is an integral part of a business that handles physical goods requiring transport. This is the process of coordinating the movement of goods from point A to point B or from a seller to the end user. The process involves ordering, collecting the goods, shipping, and receiving. At every step of the logistics process, all information and communication involve blockchain technology.
Blockchain in Government
Businesses and private individuals are not the only ones who can make use of the advantages of blockchain technology. Governments may use blockchain in asset transactions such as land, property, and vehicle. The government can access your information to see if you are the owner of certain land or vehicle for easier registration payments. It can also be used in voter registration and law enforcement to check if you have any criminal records or pending cases.
In addition, the government sector employs this technology to secure government documentation and resources, which helps streamline the operation.
Why Is Blockchain Important?
The main importance of blockchain technology is traceability. Blockchain technology makes it easier and faster for the information stored within not only to be shared but also to be traced and verified throughout the steps of the transaction process.
The proliferation of cryptocurrency and its use as legal tender for transacting goods and services online is slowly becoming commonplace. The exchange of paper money for cryptocurrency alone is a multi-step process. All these processes need traceability and verifications, which are present in blockchain technology.
How can you benefit from blockchain?
Aside from keeping your online transactions safe, you may also use blockchain for other similar purposes. Blockchain networks can be created for private use by companies to store and share data and information. Clients or partner companies can then access this stored information should the blockchain owner choose to give them access. This makes the information shared safe and secure.
Blockchain technology has branched out from being a means to decentralise cryptocurrency into a useful tool within several industries. The online purchase of goods and services requires a safe way for the information trail created by buyer and seller to be stored and secured from tampering or illegal access. This gives both buyer and seller peace of mind in business life.
Blockchain technology is still in its early stages and has a lot of room to grow in the coming future!