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Why do we need blockchain technology?

The first practical use-case of blockchain technology can be traced back to early 2008, a period at which the world was going through a miserable financial crisis. During that period, someone with an alias: “Satoshi Nakamoto”, about whom no one really knows if it was a person or a group, noticed the danger of the centralized nature of our financial system. Back then, to transfer money or even carry out a simple transaction, the assistance of a third party (like a bank or Paypal) was required.

There was a ridiculous level of power in the hands of the centralized third parties. For instance, They had all your information.

They had the power to freeze your accounts.

You had no other choice but to trust the system.

In place of this centralized system, Satoshi Nakamoto proposed a decentralized peer-to-peer financial system involving a cryptocurrency called Bitcoin and Blockchain was the basic technology behind Bitcoin.

While traders only focus on the million-dollar gains they could possibly realize, they always overlook the basic technology behind cryptocurrency. Blockchain is the technology behind Bitcoin and Altcoins, which makes storing valuables possible. Blockchain stores data in a distributed ledger that can be potentially accessed and updated in a secure way by billions of people. Blockchain technology will soon go beyond the digital currency movement and begin to influence almost every sector. From real estate to entertainment, a lot of startups, as well as existing businesses, continue to integrate blockchain into their business models. The methods of governing some countries and their democratic processes will be influenced as well by the incoming wave of blockchain.

Electoral fraud and votes hacking had been a major concern for us over the years. Advocates of Blockchain are confident that introducing a public ledger voting system could provide an unhackable system for governments while also ensuring that votes get counted faster.

Business scenario implemented using the database.

Considering the case of supply chain where multiple parties such as manufacturers, wholesalers, distributors, retailers and logistics are involved, the movement of a product through the supply chain is only individually tracked by the parties concerned. How can creative industries benefit from blockchain? | World ...

Each party will have their own database and an application to capture transactions and how products move through the chain. However, the problems with this approach are:

Different sources of truth: At any given time, all databases may not have similar data, as the process involved in updating the database depends on the organizations and there could be a delay in distributing the data to all the parties.

Exposure: For intermediaries that are involved, there are multiple copies of data, the manufacturer will not be able to control the introduction of fake products into the chain or rather the distribution of genuine products into the black market.

Human error: The data in one or more of the databases may not be uploaded due to human error, connectivity issues or application problems. This could lead to a dispute between parties, resulting in wasted time for resolving the dispute.

Lack of customer focus: The customer finds it very difficult to know if the product is genuine or not.

Business scenario implemented using blockchainHow blockchain is going to change the current scenario of ...

With the same Blockchain technology, all parties track the movement of products through the supply chain.

A single shared data storage, which is tamper-evident (designed to reveal any unusual interference) and protected using cryptographic methods.

All parties will have the same copy of this ledger.

All parties must reach a general agreement before a new transaction is added to the shared ledger.

Transactions recorded on the ledger can never be changed.

Benefits of the ledger-based approach are Single source of truth: At any point in time, all the parties will refer to the same data since it is a single shared ledger.

Early detection of human error: Since all parties need to reach a general agreement, any human or application errors will be discovered on time in the chain.

Safety: The manufacturer can make sure that the quality of their products is intact.

Customer-centric supply chain: Since blockchain enables the manufacturer to directly connect with the customer; the manufacturer is able to provide a better customer experience.

Regulatory compliance: Through transparent auditing, Blockchain allows users to comply with regulations.