The Current Impact Of Blockchain Technology On Society
Since Bitcoin’s invention in 2009 by Satoshi Nakamoto, digital currency, or more specifically cryptocurrency, has had its fair share of supporters and critics. Other than a perceived “negative” image that Bitcoin has had as a currency used in black market and dark web transactions, its main usage is made possible, and highly useful by the technology that supports it – blockchain.
Bitcoin not only presents itself as a non-conventional and revolutionary alternative to traditional currency, but the blockchain technology behind it, most importantly, provides a decentralized platform (or a ledger) that doesn’t need a third (official) party to govern it. This means that transactions appearing on the blockchain can be seen and verified by anyone. No one holds exclusive right of usage of the blockchain. Blockchain, as a distributed ledger, records an ongoing list of transactions across networks and thousands of computers and is hack-proof. It is reshaping the way we conduct financial transactions and is transforming the financial world.
But more specifically, what kind of applications are available now days that run on blockchain and are making waves across finance and other industries? Here are some examples:
1. Smart Contracts
Digital in nature, Smart Contracts are rooted in the IFTTT code (if-this-then-that), that allows them self-execution. Smart contracts execute themselves exactly as according to their programming, leaving no possibility of downtime, fraud, tampering by third-parties or censorship. According to Chris Rose, the community director of Counterparty Foundation (an organization that brings about innovation in Bitcoin technology) smart contracts are “self-automated computer programs that can carry out the terms of any contract. It is a financial security held in escrow by a network that is routed to recipients based on future events, and computer code.”
Blockchain eliminates the need for an exclusive third party to govern its usage, as well as making sure that all players recognize the contract details and that contractual terms execute spontaneously upon conditions being fulfilled.
Smart contracts are employed now days in insurance premiums, financial derivatives, crowd-funding contracts and more. Smart contracts involve computers in the running of contracts, ensuring enhanced business efficiency and a more impartial legal structure.
2. Online Voting
The biggest roadblock to carry out a fair voting process online is security. Blockchain not only ensures your voted has been successfully posted, but also protects your anonymity. Denmark was the first country to employ blockchain in its voting, with the political party Liberal Alliance using it in a campaign.
According to BitShares, a worldwide database “DPOS (Delegated Proof of Stake) leverages the power of stakeholder approval voting to resolve consensus issues in a fair and democratic way. All network parameters, from fee schedules to block intervals and transaction sizes, can be tuned via elected delegates. Deterministic selection of block producers allows transactions to be confirmed in an average of just 1 second. Perhaps most importantly, the consensus protocol is designed to protect all participants against unwanted regulatory interference.”
3. Cloud Storage
It is forecasted that within 3 to 5 years, blockchain will bring huge changes in how cloud storage is managed and accessed. Presently, cloud storage is a service that is centralized and in control of a single distributor. This means that your online property/data is under control of a single party.
Blockchain will help decentralize this technology. Decentralized cloud storage will also allow enhanced security and reliability, and will allow users to ‘’lease” storage space (like Airbnb) and, in turn, usher in new kinds of market arenas. According to Shawn Wilkinson, founder of Storg (a decentralized cloud storage network) “Considering the world spends $22 billion + on cloud storage alone, this could open a revenue stream for average users, while significantly reducing the cost to store data for companies and personal users.”
4. Digital Identity
Digital identity comes hand-in-hand with digital security, a very significant issue in the world now days. Verification of identity is part and parcel of commerce, globally.
However, blockchain technology ensures security and increased efficiency in the management of digital identity and helps decrease fraud. This will be highly efficient in the world of national security, healthcare, documents and digital retail. Blockchain, with its fool-proof method of recording unchangeable transaction data prevent common problems like database hacking, breaching of accounts. With modern methods of password protection showing vulnerability, blockchain in contrast will provide indisputable means to counter digital identity issues. Blockchain relies on the usage of digital signatures via public key cryptography and the only checkpoint involves verifying that the right private key was used to sign the contract.
5. Employee wages
Being the technology behind cryptocurrency, blockchain can also be utilized to pay employees. Bitwage, the first blockchain based payroll system has stated that it will “circumvent the costly fees associated with transferring money internationally, as well as the time it takes for such funds to move from bank to bank, payments made via Bitcoin can save both money and time for employers and employees alike.”
Summary
It must be understood that much of the technology discussed above is still under development and blockchain is still at a nascent stage, looking to expand and apply its practicality and usefulness in the modern world and its existing technologies. One thing is for sure, that blockchain has arrived and will continue to forge its presence to hopefully make the world an easier place to live in.
