Blockchain As An Application Platform
Many business use cases can be improved and/or solved by using distributed ledger technology. It can be used in many cases where trust services are needed by business applications. This can be utilized by using blockchain technology as an application platform to build the underlying trust infrastructure of the system.
Although Bitcoin, the first real implementation of blockchain, is a decentralized currency and payment system, the underlying constructs that form the basis of the system do not have to be limited to payment transactions, accounts, balances or users. Instead, blockchain technology in Bitcoin is nothing more than transactions secured and executed by a scripting language using cryptographic methods. This means that blockchain is a platform with a scripting language that can solve many use cases other than just cryptocurrencies.
This property of blockchain led to smart contracts, an innovation presented by the cryptocurrency known as Ethereum. In the case of Ethereum, developers can create private cryptocurrencies and contract-based applications using a Turing-complete language, which allows businesses to use this language to set their own rules and policies in such applications.
The distributed ledger technology used in blockchain offers multiple benefits to businesses that make a difference when implementing a solution that requires a high degree of trust for business transactions. Using the technology offers the possibility to reduce costs and offers the opportunity for businesses to build and maintain an infrastructure that delivers capabilities at lower expenses than traditional centralized models.
Blockchain can process transactions faster because it doesn't use a centralized infrastructure. Although there is no system totally secure from cyber attacks, the distributed nature of blockchain provides an unprecedented level of trust. The unchangeable property of blockchain and its public availability among its users, whether in a public ledger or a private one, provides transparency. Any user of the system can query transactions on a real-time basis.
Bitcoin was the first implementation of a cryptocurrency based on distributed ledger technology. It was invented in 2009. and since then, it has been gaining popularity and traction by business owners seeking a distributed trust model. The Bitcoin consensus algorithm is based on proof of work (PoW). In PoW, transactions are collected into blocks by miners and added to the blockchain only if the miner can solve a cryptographic challenge that requires much computational power to be solved. The cryptographic challenge can only be solved by guessing, ensuring neutrality.
Other forms of proofs have been invented and incorporated into other solutions, such as the proof of stake in Ethereum and proof of elapsed time introduced by Intel.
Bitcoin and blockchain solved a very old digital currency problem that many other digital currencies tried to solve in the past known as the double spending problem. Double spending means spending the same digital currency twice, and Bitcoin solved this by ensuring distributed consensus.
Another cryptocurrency benefit that blockchain technology provides is that transfers can cross national boundaries in seconds, with minimum fees, and without going through third-party entities such as banks.
The U.S. government and Venezuela are currently investing in resources dedicated to research and to create their own cryptocurrencies tailored to their specific needs. Despite the vast success of Bitcoin and other altcoins, the shortcomings in the design have limited the global adoption and expansion of cryptocurrencies. The expansion of cryptocurrency use will require overcoming governmental requirements and concerns, such as protecting against money laundering, illicit trades, volatile value and the lack of recognition by trusted parties.
Blockchain For Digital Identity
The need for a single centralized source of truth about identities is becoming a necessity in every community and corporation. Imagine a decentralized digital identity system, a source of truth where every single data element, such as user attributes and credentials, are included in the system only by distributed consensus.
This model is the focus of many enterprises, including Microsoft and IBM. Users get more control over their identity as they can share it only with trusted parties. No single centralized entity can tamper with user identities or data.
For users, this model improves accessibility, privacy of their data and control over their personal data. For enterprises, this model reduces identity management cost, eases the monitoring process, and improves customer service and efficiency.
Blockchain For Real Estate
Smart contracts in blockchain are little programs that execute if certain criteria are met. Smart contracts were invented in the 90s by Nick Szabo. They were integrated into blockchain technology and cryptocurrencies by Ethereum. In a smart contract, parties can agree on a sequence of conditional execution paths based on events. This idea led to the use of blockchain within industries such as real estate. Actually, smart contracts can work for any system that involves a contract between a seller and a buyer.
In the real estate industry, dealing with properties involves several parties and individuals, including owners, lenders, investors and service providers. The transactions between these entities can be problematic with the existing traditional centralized systems. This difficulty comes from many factors, including a lack of trust among peers, fraud and deficiency of a single source of truth about real estate and its history. Blockchain technology offers the possibility to have a real estate system with a very efficient search engine and lookup source for the current properties on sale.
As you can see, blockchain technology offers plenty of opportunities for various applications. And as the technology continues to progress, its applicability will only continue to broaden.
Source: All the above opinions are personal perspective on the basis of information provided by Forbes and contributor Forbes Technology Council.