Will blockchain change the world? Almost everyone around us is sure that blockchain is here to change the world. In this article, we will explore the idea of blockchain’s impact on our world.
The idea of blockchain changing the world comes from the decentralization aspect. It’s the pseudo creator; Satoshi Nakamoto created the virtual currency bitcoin, which lead to the discovery of blockchain technology. If you see the timeline, you will see that the decentralized cryptocurrency was created around the last global financial crisis, which gives the discovery much more importance.
So, will it? Let’s explore below.
How Blockchain Will Change The World
Before we decide to answer the question at our disposal, we first need to understand the idea behind the blockchain.
Centralization And Decentralization
If you are familiar with the current system, you will see centralization everywhere. Centralization is a tested way to deal with processes. It offers control with relatively effective and efficient means. However, it does come with a lot of disadvantages. The main disadvantage is its ineffective approach. Centralization is generally not so friendly when it comes to efficiency. The other obstacles include – no transparency, lack of proper security, and fraud detection. All of these are just too much to ignore now.
With the advent of blockchain, everything changed. It brought decentralization into play. By using blockchain, any business improves its process to new heights. If you are part of any organization, then you would already know that it is not possible to manually control or monitor different aspects of the system. With decentralization, it becomes easy for businesses or enterprises to automate the different aspects of their processes.
Blockchain is defined as a peer-to-peer network that is distributed in nature. In a public blockchain, everyone can join and participate. To ensure that the blockchain maintains data integrity and fight fraud, each peer has a copy of the ledger. All of this brings decentralization into play. Yes, there is no need for a centralized entity for a blockchain network to work.
Blockchain’s trend was always there among businesses, but the adoption rate skyrocketed after the popularity of bitcoin. With an improved exposure to Bitcoin and cryptocurrency in general, businesses become more confident in adopting a decentralized approach, i.e., blockchain.
The distributed nature means that blockchain can run on the internet without the need to build another infrastructure for it. It is a global phenomenon, not only that it is open-source and utilizes state-of-the-art cryptography to ensure that the data stored in the ledger can only be accessible by the rightful parties.
Read more about Blockchain in Blockchain For Beginners: Getting Started Guide
The evolution from the relational database to the decentralized database
Traditionally, data is stored within the relational database. You can think of them as an advanced excel spreadsheet where columns and rows are used to store data. These tables are stored using hard drive and then served according to the user’s demand. The data is stored in a centralized location. A centralized database suffers from performance when the number of requests has increased manifold.
To overcome the restrictions of the centralized database, more powerful computers and techniques are deployed to process requests faster. All of these can lead to databases to be more vulnerable to hackers. It also requires a huge infrastructure budget to run and manage. All of these seem to be a limitation for the businesses that are trying to find practical solutions to their product.
All of these will be changed by blockchain, which is technically a decentralized database. As there is no centralization, each node has a copy of the database, i.e., ledger. It enables businesses to improve their data redundancy to a whole new level.
This is the first step where blockchain will change the world.
5 characteristics of blockchain technology
Now, that we understand the evolution from centralized systems to decentralized systems, and relational databases to decentralized databases, let’s take a look at the five key characters of blockchain technology. These key aspects define blockchain technology the most.
- P2P network: Blockchain technology is a peer-to-peer network where the already existing devices can participate and become part of the network. The P2P network also allows computers over a network to work together and offer combined computational power to the whole network.
- Cryptographic hash function: Another key feature of blockchain technology is the use of a new cryptographic hash function. The hash function takes an input and then outputs a value which is then connected to the next hash function. It is a one-way function that makes it impossible for hackers to guess the value. It protects the information in the best possible way. Also, the hash function works for valid users who own the information or asset.
- Distributed ledgers: The distributed ledger feature is one of the best features of blockchain. It enables peers to have a copy of the ledger. To make sure that they do not have to download the whole database, advanced techniques are used to ensure consensus is maintained within the network. It also enables peers to validate information quickly without the need to rely on a centralized authority. Moreover, it also ensures that no fraud takes place.
- Pseudonymity: The blockchain network also enables users to stay anonymous if they want too.
- Immutability: Lastly, the cryptographic hash feature, distributed ledger, and other features ensure that the data, once stored cannot be changed without the original user’s permission.
The points clearly hint that blockchain will change the world.
Read more about 6 Key Blockchain Features You Need to Know about!
5 Benefits of blockchain technology from a normal person perspective
All the above essential features are ground-breaking from a technical’s guy perspective, but what about people who are not technically adept at understanding its complexity? How are they benefitted? Also, when we say “changing the world,” we expect, changing the normal people live. The below points will help you understand of blockchain’s impact from a general perspective. You can also take the following points as blockchain real-world use cases. Let’s list the points below.
Send money quicker
It is a common activity for people to send money for both businesses and personal uses. Most of the services that facilitate payment take a few days to complete. This can lead to issues if you need to send money for an emergency.
The process takes more time if you are doing a foreign transition. Banks generally hold the payment for a few days before they use the SWIFT messaging system to transfer funds. This is done by banks due to strict rules around foreign money transfers. The wait time also increases more because of the other intermediaries.
The solution is blockchain. You can send cryptocurrencies without the need to wait for days for the receiver to receive the payment. Banks are also eager to adopt cryptocurrencies for a huge transfer amount of money. It generally helps them to do bank to bank settlements faster and securely. One of those cryptocurrencies that are used by banks includes Ripple’s xCurrent solution. It enables them to make money, sending more efficient and fast.
Buy house easily
If you ever try to buy a house, you will have to go through a lot of steps. It is a tedious process that can easily take up to months. It also includes a lot of paperwork. On top of all of these, you also need to pay for a lawyer’s fee. The process of buying a house depends on the place where you live. In some places, it can be much easier, but overall, it takes a lot of time and effort to buy one house.
The real estate market also suffers from trust. It is easy to do frauds and create paperwork that is forged. To ensure trust, a lot of paperwork needs to be checked and managed by multiple entities, including government agencies, banks, and so on!
When it comes to blockchain, you do not have to deal with so many intermediaries. It is a trustless platform. This means that you know what you are doing and what you are getting into. You can verify the owner of a property before making the deal. The agreements are transparent and are tamper-proof. This makes everything work smoothly. It also means that you have to do very less paperwork, improving your purchasing experience to a whole new level.
Products you buy will be genuine
Blockchain works seamlessly with the supply chain. Any product that you buy needs to go through a series of destinations before it arrives at your doorstep. During its travel time, it can be open to multiple fraud entities that can tamper the product for their own benefit. If that happens, you will not get the product that you paid for. You might get a tampered product or a product that is completely replaced by a fraud one. In any case, it is easy to catch fraud items.
Blockchain usage on the supply chain solves all of these problems. By using blockchain, companies can keep full track of the condition of the product. If the product is changed or tampered, the system will get alerted and hence discard it from the supply chain. In the end, you will only get genuine products into your hand.
Health problems will be easier to tackle
Health problems are very common in developing countries. It is quite common for people to go to doctors for treatment. Most of the time, you get transferred from one floor to another to find your doctor or healthcare specialist. This also means working with documents that are not stored in a centralized space. Keeping a full medical record also becomes tough for patients as their medical records can span through years, or multiple doctors with different treatment approaches. In short, it requires a lot of patience for patients to manage their health problems.
Blockchain can completely change how health problems are managed. It can enable medical record holding in a decentralized manner, which can be accessed by the patient’s authority. It will enable health practitioners to understand the patient’s case better and ensure that they can get treatment as soon as possible. It also makes diagnosis faster and more successful. Last but not least, blockchain also reduced the circulation of fraud drugs.
Better reach and ability to earn money
Blockchain also gives you more chances to earn. Big companies are slowly embracing blockchain and helping connect people.
The general use-cases are a good example of how blockchain will change the world.
Learn more about the blockchain use-cases by reading Real-World Blockchain Use Cases – 46 Blockchain Applications and Blockchain Usage: List of 20+ Blockchain Technology Use Cases.
How disruption will occur
Now that we have understood the benefits of blockchain, it is now time to reflect upon how the change will occur. The first sector that will see the change in the financial sector. The finance sector is going through major problems right now. It requires disruption to survive. Blockchain can be the perfect catalyst and solution that can provide the necessary means to solve the pains of the blockchain industry.
Blockchain changes how money flows through institutions or traded among traders
In fact, blockchain has the potential to change almost every industry out there. It can create a more efficient and prosperous world where people can connect with each other without the need for intermediaries. Companies can also utilize the blockchain technology to provide a more transparent, trustworthy, and efficient service to the consumer. For instance, a company can use a permissioned network to create an efficient system. They can also utilize it to keep transparency with the end-user by sharing information that can help create trust among users.
As of general users, they can also utilize the blockchain to full potential. If you are a creator, you can connect with the buyers directly using a blockchain solution. Let’s take an example to understand it. Currently, the music industry is completely controlled by the music companies that are responsible for the distribution of music to the user. They take a hefty profit margin cut and also have a bias towards certain musicians. This can mean that new musicians can have limited reach and would end up earning way less than what they deserve. To overcome this, creators can use blockchain-based solution to share their creations. This way, they can directly reach the audience and make more money than they would if they go through an already established centralized approach.
How Blockchain Will Change Financial World?
The financial world will be completely changed with the help of the blockchain. The Ethereum blockchain, for example, has the ability to automate, secure, and operate an efficient process in the finance and banking sector. It will also optimize cost and digitize securities and other assets without increasing the cost required to manage them.
The financial world can always benefit from the transparency, trust, privacy, scalability, and security that blockchain offers. For instance, the financial market can utilize programming capabilities and automate things such as KYC/AML, data privacy, and so on. It can also help streamline processes with improved efficiency.
Some of the best blockchain uses-cases in the financial world include the following.
- Investment management
- Lending and banking
- Trade finance
How Blockchain Will Change Real Estate?
Have you ever tried to buy a home recently? Then, you would know how much effort and time you need to complete a purchase. Any real estate transaction can take anywhere between a few weeks to months to complete. The reason behind the delay is the use of a less efficient all-together process. The large scale of the real estate makes it very hard for buyers and sellers to coordinate and manage their properties.
With blockchain, real estate can see many changes, including bringing in a more efficient process with the help of automation. Other benefits include real-time payment settlements, reduced costs, tokenization, and real-time payment settlements.
The biggest advantage is the reduced time it takes to make deals. With proper tokenizations, real-world assets can be stored and traded on the blockchain. Tokenization also means that other kinds of information can be stored online, including real estate funds, governance rights, and more!
Few of the blockchain use-cases in real estate include the following:
- Deed records and Land titles
- Leasing and payments
- Real-time accounting
- Tenant identity
How Blockchain Will Change HealthCare?
The last sector that we are going to discuss is the HealthCare. Right now, healthcare can also benefit from the blockchain. There are many pain points in the healthcare industry. For example, patients have always had to carry their documents with them. This can lead to issues including wrong data input.
Another thing that needs to be fixed is the drug traceability. With no proper traceability, drugs can be counterfeited easily. Research is also hampered, considering that patients’ data is not accessible for the most part.
Few of the blockchain use-cases in healthcare include the following:
- Drug traceability
- Patient consent management
- Electronic Health Records(EHRs)
- Better clinical trials
Read more about Blockchain’s impact on HealthCare here: Blockchain For Healthcare: Use Cases And Applications
What can it go wrong?
The path of making blockchain global and reaching to everyone around the world is not easy. Blockchain seems promising, just like any other new technologies out there. When the internet came along, it caused ripples and hailed as the single most revolutionary technology out there. It did change how we connect, but it took its own time to evolve and improve.
Artificial Intelligence was also hailed as the next-generation technology that can change the world. My point is that almost every new technology shows promise as they are better than the previous ones in one way or another. Only time can tell how blockchain will impact society. For now, everyone is on the same page. But, one thing is for sure is that blockchain is very promising and has the potential to change the world around us.
However, what things can go wrong with the overall bright vision for blockchain technology? One of the biggest hurdles that need to be taken care of is governance. As blockchain is decentralized, governing it can be a very tricky situation. As it is currently in a growth stage, it can be used for mischievous or harmful things. The main focus should be to create a governing body that can dictate safe rules and regulations for using blockchain technology. This way, we can ensure that blockchain technology is used in the right way.
W3C Consortium takes care of the internet. They are responsible for setting the web standard.
So, it is very hard to say what direction blockchain will take firmly. Its impacts have already been seen in many use-cases that we discussed above, but the adoption rates are still struggling.
If you think that blockchain cannot change the world, then you are not alone. One article from TheNextWeb discusses its point of view on how blockchain will be impactful, but not change the world. They think that the main pain points include scalability, private keys, energy to run blockchains, and lack of developers, deters blockchain’s impact on our society.
Our article was completely focused on how blockchain will change the world. I think I did justice when it comes to accessing the blockchain’s impact on our current world. We also managed to envision its impact on the future of our society. Do you agree with the points that I shared? Comment below and let us know.