Why Blockchain?

Today democracy has been an adopted model of public functioning mostly everywhere unlike the monarch rule back 18th century. Most countries today are formal democracies. People now want to govern themselves and make policies programs rules and laws people-centric.

In that scenario, a technology that is completely decentralized and does not concentrate any kind of power and autonomy in hands of a certain individual or organization will have a promising future. The Blockchain model is being widely accepted everywhere be it private or even government units.

Before moving forward let’s take a look at the history of blockchain.

Although it was just introduced ten years ago, blockchain has the potential to become the foundation of the world’s record-keeping systems. It was developed by Satoshi Nakamoto, the anonymous developer of the virtual currency Bitcoin in 2008. He established the first blockchain as the public ledger for bitcoin transactions.

But way before it, in 1991, this concept is described for the first time by Stuart Haber and W Scott Stornetta in their research paper, where they talked about ideas in theoretical form with all-set logic. Progress then started with implementation by Computer scientist Nick Szabo who worked on ‘bit gold’, a decentralized digital currency.

Then in 2000, Stefan Konst publishes a theory of cryptographically secured chains, with implementation techniques.

But according to financial experts, acceptance of this decentralized system has also been attributed to the financial crisis of 2008, and the great repression worldwide. By the summer of 2007, financial markets all across the world were indicating that the long-overdue cost of excessive reliance on cheap credit was finally going to be realized.

Due to economic turmoil, people started building a trust deficit in central organizations, be it banks or governments. Post-crisis there has been an increasing demand for more accountability and transparency, what is happening inside four walls of an institution is called to question. Which is still prevalent.

A fair open and people-centric government is no longer a demand, but demand is on the tangent that all public-centric institutions should now be in hands of the public to reduce middleman interference.

And here emerged blockchain technology which fulfills these requirements with all protective measures.

Now let us have a look at some applications of blockchain

Money transfer and financial exchange

The initial idea that led to the development of blockchain technology, is the money transfer and financial exchanges. It now includes lending, insurance, real estate, and investments.

Compared to using current money transfer services, adopting blockchain for money transactions may be cheaper and faster. This is especially true for international transactions, which are sometimes expensive and delayed. Often termed as an international wire transfer. Here multiple banks including the central bank, corresponding banks, and receiver bank are in charge of transaction processes across borders.

Lending: Blockchain technology allows lenders to implement securitized loans via smart contracts (Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met.- this we will discuss in upcoming blogs). Blockchain-based smart contracts enable specific events to immediately trigger actions like service payments, margin calls, full loan repayment, and collateral release. As a result, lenders can give better rates because loan processing is quicker and cheaper.

Insurance: Customers and insurance companies may benefit from more transparency if smart contracts are used on a blockchain. Customers would be discouraged from filing duplicate claims for the same occurrence if all claims were recorded on a blockchain. Smart contracts can also expedite the payment-receipt procedure for claimants.

Real estate: In transferring deeds and rights to new owners after real estate transactions, a tonne of paperwork is needed to verify ownership and financial information. Real estate transactions can be documented using blockchain technology, which can offer a more accessible and safe way to verify ownership and transfer it. This can expedite transactions, lessen paperwork, and result in cost savings.

Investment: Anyone can purchase stock in a company that is developing blockchain solutions as of January 2022, but you cannot invest directly in a blockchain as of that date. Digital securities are tokenized using blockchain technology, and by purchasing securitized tokens, you can acquire ownership in a corporation whose shares have been tokenized.

Security systems

Data structures created by blockchain technology include built-in security features. It is founded on cryptographic, decentralized, and consensus concepts that guarantee the integrity of transactions. Hence research is being done to adopt its model in sectors where smooth functioning is required with utmost security of personalized data.

In sectors like travel, healthcare, finance, and education, blockchain technology can be used to safeguard access to identifying information while enhancing access for those who need it.

To further understand it in detail, read- Blockchain: prospective future of public administration

Voting

By using blockchain technology, it will be possible to prevent voting fraud and ensure that no one can vote more than once. Additionally, it can broaden participation by making voting as easy as hitting a few buttons on a smartphone. Additionally, the expense of holding an election would significantly drop. So EVM can possibly be replaced by blockchain with proper safeguards.

NFT(nonfungible tokens)- digital assets

To read NFT in detail, visit- NFT: owning digital space

Piracy control

The blockchain Distributed ledger technology (DLT) and the internet could aid in preventing pirates from disguising their illegal piracy activities online. Blockchain technology is already being used by businesses to combat piracy through digital watermarking and content surveillance.

Product and supply chain tracking

To manage the supply chain more efficiently, parties can keep track of price, date, location, quality, certification, and other pertinent information using a blockchain supply chain. The accessibility of this data via blockchain can improve visibility, reduce losses due to regular market and fake products, and boost the traceability of the material supply chain.

How products travel from the manufacturing unit to the end user, everything is kept in check in this tracking.

Denmark Used blockchain to drive supply chain transparency and this model is widely recognized and replicated.