If you have been following the rise of cryptocurrency, chances are that you’ve heard of the term blockchain. Despite the increasing ubiquity of the term however, many are still left wondering exactly what is blockchain, what it does, and why it seems to be so important even beyond bitcoin.
Blockchain is a technology that allows cryptocurrency transactions, to happen without the need for third party intermediaries. Blockchain allows for greater security by using encryption technology and algorithms that make sure that any data transferred in any exchange is protected.
The potential for blockchain is massive and its impact on various sectors can be far-reaching. When it comes to blockchain beyond bitcoin, the following are five key sectors worth watching out for :
According to an article by Business.com the transformative impact blockchain could have on our day-to-day lives stands to rival that of even the Internet. This is especially true in the financial sector, where cryptocurrency is eliminating the need for middlemen in transactions. Parties such as lawyers and investment bankers have always been seen as an integral part of transferring money between corporations, but this could all change with peer-to-peer lending enabled by blockchain.
Banks have taken note. In order to stay relevant, many have of them have begun to work on cryptocurrencies of their own. Banks such as ING, JP Morgan and BNP Paribas among others, for example, have started to build business versions of the technology behind Ethereum, one of the more popular cryptocurrencies on the market. As we can see, blockchain doesn’t necessarily mean the end of banks. The knock-on effect will be more jobs in the financial sector that are linked to blockchain and cryptocurrency. A long-form post by Maryville University on finance degrees outlines how jobs for financial planners are expected to increase by 30% in 2024. This shows how the technology won’t get rid of jobs, but simply change the type of work needed. It is therefore imperative that the next generation of bankers are trained in working with cryptocurrencies and blockchain.
One notable aspect of blockchain is its use of decentralized ledgers. This means that instead of all the data being stored in one database, the data will instead be spread around a network of ledgers. This is in every participant’s best interests, as it will ensure that everyone has the same information. This system increases transparency and reduces the likelihood of an error being made.
The Journal of Health finds that the benefits of blockchain have already made its way to healthcare. Medical data, for example, is now stored in a more secure manner and facilitation of file transfers between clinical trials, patient data, and pharmaceutical storage is easier with blockchain. Startups such as MediLedger also utilize blockchain to track and trace information for prescription medicine.
As mentioned above, blockchain has enabled greater security for peer-to-peer transactions. Charities would do well to take advantage of this, as decentralized ledgers and encryption provide security measures without having to account for the additional costs that come with doing business with third parties such as banks. This will allow more money to be spent on helping those in need, and help prevent any fraud happening during the transaction period.
In a world where many of the top companies have become increasingly more data centric, it is understandable that fears about data privacy have gone up as well. Security breaches where personal information has fallen into the wrong hands have resulted in a demand for heightened security measures in the digital world.
Blockchain aims to fill that role. Entrepreneur journalist Santhosh Palavesh writes that more security is actually one of the primary benefits of blockchain, with the encryption of all data ensuring that modification cannot be done by just anyone. The decentralized nature of it also ensures that every computer it transacts with has a complete copy of the data, as opposed to a singular database that could be an easy target for hackers. There is no single repository of information to be hacked – it is as if the data was stored in “blocks”, hence the term blockchain.
Advocates for blockchain often tout it as a great equalizer between consumers and banks, but many have also questioned the impact it would have on global democracies.
An advantage of blockchain is the heightened security it could provide for recording votes, thus reducing the risk of fraud. A decentralized system would also make sure that different copies of data would all have to contain the same information as well, thus giving way to a method of cross checking that would make recounts unnecessary.