The creation of blockchain technology has piqued a lot of interest in people. Tech companies are flashing ‘Blockchain is the future!’ everywhere in their marketing campaigns. Most of us know blockchain as the technology that enables cryptocurrency, like Bitcoin, to function. However, blockchain technology has a much broader scope than that.

Blockchain is a revolutionary invention of the digital age. Cryptocurrencies are currently the most widespread application of this technology; however, their numerous advantages are compelling innovators to find new ways of implementing blockchain and distributed ledger technologies in other areas. It is time for us to take blockchain technology out of the shadows of cryptocurrency and look at its other possible applications.

Before that, let us first answer the following questions:

What is blockchain technology?
How does blockchain technology work?
How is it different from distributed ledger technology?
What Is Blockchain Technology?

Blockchain technology is one of the types of distributed ledger technologies. Blockchain is a virtual ledger that connects all data from the first step of a transaction to the very last one, thereby creating blocks of information. Each transaction in the chain needs to be validated by each node on the network. It uses cryptography to encode all transactions. So, blockchain technology is unique as it provides transparency and encryption at the same time. In other words, nodes in the network won’t know what happened, but they will know that it happened. Also, they can verify that whatever happened is genuine or not.

How Does Blockchain Technology Work? And, What Makes It Secure & Transparent?
A group of researchers first introduced the concept of a chain of encrypted blocks of data in 1991. The original intention behind the idea was to do timestamping of digital records. But how could it have helped with digital records? To understand that, let us see how blockchain technology works.

Blockchain is a chain of information (blocks) distributed over a network. The type of blockchain determines the data that will be within a block. The Bitcoin blockchain, for example, keeps track of the sender, recipient, and amount of coins involved in a trade.

Along with the data, each block contains a hash and the hash of the previous block. Now, what is this hash? For simple understanding, you can compare a hash to a fingerprint. It identifies a block and all its contents, and is always unique, just as a fingerprint. Once the block gets created, the system calculates its hash.

Hashes are very useful when you want to detect changes to blocks. If the fingerprint (hash) of a block changes, it no longer is the same block. It, in turn, creates a chain of blocks (with a hash of the previous block in every consecutive block), and it’s this technique that makes a blockchain so secure.

What happens when someone creates a new block? That block is sent to everyone in the network. Each node then verifies the block to make sure that no tampering is being done with it. If everything checks out, each node adds this block to their blockchain. All nodes in this network need to create a consensus. They all have to agree about the validity of a block. If a hacker tries to tamper with a block on a node, the other nodes in the network will reject it, thereby, securing the blockchain.

Coming back to why researchers were considering using blockchain technologies in the timestamping of digital documents, the reason is that in blockchain, one can only add new details. Nobody can alter or delete existing data. It is one feature that sets it apart from conventional databases. Since you can’t change or delete even a single block of records, every transaction exists in its history. It is for this reason that blockchain technology is considered highly transparent and secure.

How Is Blockchain Technology Different from Distributed Ledger Technology (DLT)?
Blockchain technology is a type of distributed ledger technology. A distributed ledger is a network that is distributed through many machines or nodes, rather than being centralized. Each node maintains the ledger in this technology, and any data change is reflected in the ledger. Unlike a blockchain, the updates on each node in a distributed ledger is done separately.

A blockchain is a distributed ledger that is completely open to anyone. They have an interesting property, i.e., once some data has been recorded inside a blockchain, it becomes very difficult to change it.

The primary difference between blockchain technology and DLT is that in the former, all the blocks are sequenced in a particular way; on the other hand, distributed ledgers have no requirement for a specific sequence of data. In comparison to a distributed ledger, blockchain does not require a central authority to control operations. It is, in effect, entirely decentralized.

In short, blockchain technology is a step up from distributed ledger technology. In any type of distributed ledger, a consensus is imperative. Blockchain technology developers have achieved this consensus with algorithms like proof-of-work in bitcoin and other cryptocurrencies.

How the World Reacts to the Blockchain Boom?
Since cryptocurrency disrupts centralized systems, many governments in the world are apprehensive of its use. Countries like India are looking to ban the possession, transaction, and mining of cryptocurrencies. However, even they are open to finding and using new applications of blockchain technology.

The government think-tank body of India, known as NITI Aayog, has published their discussion in a paper called “Blockchain: The India Strategy”. In this paper, they say that the technological complexities of blockchain can be daunting to many policy-makers. However, with blockchain’s power, we can achieve secure data systems for businesses, and ease of living for people, by introducing transparency in government and private information systems.

Governments globally are exploring new avenues for the application of blockchain in society and the economy. For example, in 2016, Russia announced a pilot project to use blockchain technology in automated voting systems. South Korea has demonstrated how to use blockchain technology in e-governance, and more pathbreaking applications. New blockchain systems for medical records, e-notary, tax collection, etc., can become convenient and transparent ways to facilitate the ease of living. Furthermore, due to its transparency, it could play a massive role in ending corruption.

Blockchain technology works against a backdrop of a vast horizon. The technology finds application in the financial sector, education, real estate, healthcare sector, and possibly many other areas. The World Economic Forum has put blockchain as one of seven technologies expected to revolutionize various aspects of our lives. Like the governments worldwide, businesses must see the larger picture of blockchain technology beyond just cryptocurrency. Let’s see some of the incredible applications of blockchain.

Applications of Blockchain Technology Apart from Cryptocurrency

Payment Transfer and Processing
Blockchain technology can expedite cross-border transactions and bring transparency and security to digital transactions. With intermediary banks excluded from the equation, the authentication of transactions can happen 24 X 7 securely. The majority of blockchain transfers can happen within no time.

Smart Contracts Automation
A smart contract is a self-executing contract in which the terms between the parties are written explicitly into a digital code. The code, as well as the agreements it contains, are spread across a decentralized blockchain network. Transactions are trackable and permanent, and the code governs their execution.

Blockchain can revolutionize the way companies hire services. Smart contracts can reduce the payment time, help implement instant payments, and automate payment flows. While drafting smart contracts, you can specify all the conditions that should meet for automated payment transfer. The concerned party gets paid once they meet the requisite criteria.

Blockchain of Medical Records
Blockchain technology can help to store and share medical records securely. The patient here has the key to access his information and can allow access to others. The encryption will allow complete security of the patient’s medical record. The doctors would have to get the patient’s permission to access the documents.

Blockchain Technology in Real Estates
Blockchain technology can make buying and selling real estate properties seamless. The land or property deals include a transfer of titles. Traditionally, there used to be a lot of documentation in transfer of ownership. The documentation went from manual to digital, but fundamentally remained the same. Blockchain can disrupt this system.

Blockchain can hold the title records in a decentralized network. It can provide a transparent view of the transition and clear visibility of who holds the legal possession. Remember that every transaction is recorded forever in the history of a blockchain network. This feature can help in resolving land disputes swiftly.

Digital Wills in Blockchain
Blockchain can become a game-changer in resolving will and inheritance issues. Instead of writing their will on paper, users can create and save their digital wills on a blockchain. It will bring the necessary transparency in will and inheritance matters. The will gets legally binding through smart contracts. The smart contracts will divide up inheritances based on the meeting of age or other conditions of the beneficiaries. Thus, leaving no questions on who should get what assets.

The Way Forward with Blockchain Technology
Despite being a three-decade-old idea, in implementation, blockchain technology is still in its infant stage. But, it is a fast-growing baby now. According to the World Economic Forum (WEF), by 2025, 10% of global GDP will be stored on the blockchain. With so many new emerging applications, it is not surprising to see why.

By enabling self-regulation, blockchain will promote communication between businesses through a reliable medium with less dependence on cumbersome regulations and compliances. The technology can augment the ease of living and governance by empowering people with transparency, decentralization, and accountability.

Blockchain and DLT can provide safe, fast, and cost-effective financial transactions. Blockchain technology can help secure legal documents and medical records, through encryption, over a distributed network. Combining blockchain technology with cloud storage, we can get a secure and transparent system for digital identification, secure voting, financial credits, and much more. To sum it up, blockchain technology can create a near-flawless management system that can make social and financial tasks seamless.

Source:- https://advantaltechnologies.com/services/blockchain-development/

Author's Bio: 

I'm Sandesh Tallera, Co-founder & Director at Advantal Technologies. I am a seasoned and multi-functional IT entrepreneur with both technological and managerial expertise in the software industry. I believe in the power of simple ideas and am driven to combine them with appropriate technology to make a positive difference in the world. As a versatile communicator, I am capable of recognizing and defining customer problems so that an effective solution can be created. As a lifelong learner myself, I have a passion for inspiring and assisting my team in continuing to learn and develop with our company.