Blockchain is a chain of blocks made up of encrypted records. Blockchain development will do to transactions what Internet did to information collection and distribution.
That’s the elevator pitch for blockchain.
Now let’s take a look at how it works in the real life. Imagine you want to buy a car and register it in your name. This requires you to go through several physical checks and paper records to ensure the car’s title and sale worthiness before getting into the registration process.
Apart from your scrutiny process, the records would also have subject to multiple scrutinies by middlemen which makes the process tedious and time-consuming.
The bad news is, despite the record checking and vetting, transactions do end up in a folly.
Information tampering, false information and errors make can make the process unreliable and difficult.
Blockchain aims to eliminate all these difficulties in tracking, recording and vetting ownership of tangible assets and digital information.
Any business that has digital assets ranging from contacts to smart contracts can gain significantly from Blockchain development.
What Makes Blockchain So Powerful?
Blockchain is an uneditable (the technical term is immutable) digital ledger that is updated on a real-time basis. It is stored on a distributed network connected by peer-to-peer systems that no single authority owns completely.
It is decentralized
Nobody can claim ownership over a blockchain neither can anyone take down blockchain single-handedly.
It is time-stamped & cryptic in nature
Every single record in Blockchain is encrypted and time-stamped. It is not possible to edit the record unless it is owned by the user and also the user has a private key to access it.
Records are immutable
Each block of records in a blockchain is linked to its previous block or series of blocks, which when edited, updates all dependent blocks on a real-time basis.
Uneditable records, time-stamping and encryption has led to wide adoption of blockchain for real-life business applications. Before you know it, Blockchain would be influencing every single transaction that you carry out in our everyday life.
Almost every industry that relies on digital data would be disrupted by Blockchain. The positive impact will be evident on two major industries: Banking and Retail.
Reducing Lender’s Risk in Banking & Financial Transactions
In the banking industry, earning and maintaining customer trust is of paramount importance. Existing methods of clearing settlements, trade finance sanctions, syndicated loan processing, etc. are prone to fraud and error.
Blockchain can reduce that lender’s risk by combining databases of financial transactions, loan payables, bad debts, loan defaulters, etc.
For instance, a lender can cross-check if a collateral security is already pledged with any other bank before the loan is sanctioned. Similarly, the creditworthiness of borrowers can also be verified by scrutinizing their past banking and financial transactions enlisted in the digital ledger.
Since all the records are decentralized and cannot be edited easily, it makes a trustworthy source for lenders to rely on for decision making. This also simplifies quicker cross-border payment transactions which otherwise have to be routed through intermediaries.
Who is using it?
The Royal Bank of Canada is experimenting with a Hyperledger based Blockchain system to facilitate cross-border transactions between its Canadian and US banks.
Providing real-time traceability in Supply Chain Management
Supply chain is one sector where inventory traceability needs to be ensured each time the inventory status or value changes.
For instance, perishable items like meat, milk, vegetables, etc. require being transported in cold storage condition until they reach the store rack.
A retailer would want to know all possible details about the inventory like its origin, time when it was shipped, the temperature at which it was stored during transit and similar status updates of the inventory at all stages of the supply chain.
Such information should also be verified and authentic. Blockchain makes it possible by setting the platform for various businesses using the same network to validate the data on a real-time basis. In a supply chain, it would include the farm, the transport agency, warehouses and retail stores.
Each time the block, that is the record is added to the chain, it becomes part of the immutable ledger which can be referred to spot quality issues, end of shelf-life approaching goods or even spoilt goods easily.
Who is using it?
Walmart has already optimized its retail options for the good by implementing blockchain for ensuring food safety and to improve end-to-end supply chain traceability.
Blockchain development has numerous practical uses for everyday business transactions. The number of applications to which it is used will exponentially increase in the coming days. The adoption rate will increase drastically as and when business leaders gain clarity over existing security. The day when Blockchain will become the common norm of business transactions is not very far.