Bitcoin turned into a goldmine overnight. While critics had their say on it, many people benefited from their investments. Some are still millionaires because they moved fast and embraced Bitcoin. However, the irresistible force faded as fast as it came. If you were on the sides watching before making the bitcoins investment, it is too late. Of course, you will make money but not billions. Although it is dismissed as an investment, it is still significant in the world economy.
The mechanism behind bitcoins is the concern for the existence of many industries. Bitcoins was only a part of something big, blockchain technology, which is more established than you can imagine. The technology is deeply rooted in internet services, which most industries are integrating into their structures. The digital era where technology is everything creates more opportunities for blockchain to take control of other industries.
How does blockchain work?
It is important to understand this technology in money transfer before relating it to various economic sectors. The best way to explain how blockchain technology works are through an excel spreadsheet. Imagine several people accessing the same spreadsheet with similar data. Any changes by one party reflect on another user’s screen. If any user needs to update information on their account, it is posted as a request where every individual has to validate before the change occurs. Every member is then able to view the changes in their respective accounts.
Blockchain technology works on the same basis. There is a ledger board that displays all changes in real time irrespective of an individual’s location. The fact that no user can make a change without the consent of the others makes it a block. If an individual tries to push for a change, it won’t be posted until all members validate. In blockchain technology, the transactions are in various categories thus many blocks, together forming blockchain.
Blockchain technology was developed to boost security and convenience in financial transactions. As mentioned, bitcoins is only a form of money that utilizes this technology.
To understand this technology better, consider a simple money transfer:
Person A needs to transfer money to person B. The request is sent online to all participants who have to approve the transaction. Once all parties validate the transaction, in this case, a block, it is added to a queue of other transactions in waiting. This step is irreversible and secured; no party has the right to interfere with the transfer. It is considered a valid and permanent entry.
Blockchain influences structures of most industries across the globe. Here are the top sectors that blockchain is set to disrupt.
One of the main challenges in the finance industry is record keeping. Inconsistency, loss of data, and missing entries have significant effects in financial management. Over-expenditure, fraud, and missing funds are all attributed to the improper keeping of financial records. Transparency in records is also a major factor in financial management. All these challenges are solved by blockchain technology. Banks and other small financial institutions do not have to keep fragmented databases and go through the trouble of compiling at the end of every day. With blockchain technology, transfers and any changes in accounts are updated in real time irrespective of the user’s location. Bank systems can undergo an overhaul with blockchain technology.
Procurement and supply chain is a sensitive part of any company. Fraud and losses begin in this department. It is often difficult to trace bulk purchases and asset transfers. Companies lose a lot because of inconsistency and omission of details concerning source and destination. Smart contracts provide details on the source of goods, asset procurement stages, and compliance with regulations. This is all managers need.
Copyrighting is a major challenge in the music industry. After spending time composing a song, getting an affordable and credible recording company that will help in distributing and monetizing your project is not easy. Blockchain offers a public database where your copyrights are guaranteed. No change or transaction can happen without your consent. A database is also a marketing tool. This eliminates mediators in the industry.
Patient data privacy is crucial. Different healthcare organization or doctors have no business accessing a patient’s data if there are no specific benefits to the patient. Blockchain platform ensures all data is centralized, traceable, and secured; the data can only be retrieved after a patient, family member, and specific doctor validate.
Transparency is crucial in renting and buying property. Pricing and documentation are sensitive processes that require credibility and honesty. Blockchain provides a shared database with history and updates of negotiation transactions, fees, and all nature of paperwork. Blockchain makes it simpler and safer.
Asif Razzaq is an AI Journalist and Cofounder of Marktechpost, LLC. He is a visionary, entrepreneur and engineer who aspires to use the power of Artificial Intelligence for good.
Asif's latest venture is the development of an Artificial Intelligence Media Platform (Marktechpost) that will revolutionize how people can find relevant news related to Artificial Intelligence, Data Science and Machine Learning.
Asif was featured by Onalytica in it’s ‘Who’s Who in AI? (Influential Voices & Brands)’ as one of the 'Influential Journalists in AI' (https://onalytica.com/wp-content/uploads/2021/09/Whos-Who-In-AI.pdf). His interview was also featured by Onalytica (https://onalytica.com/blog/posts/interview-with-asif-razzaq/).