Blockchain, its possible applications and its future in the digital ecosystem.
Still considered an emerging technology by academics, blockchain has been making noise for a few years now. Briefly, its operation is based on the execution of protocols within a decentralized network that allows to keep a time-stamped record of the transactions performed. Two general principles govern its use:
The first can be illustrated by the principle of keys, one of which is private and allows its owner to sign a transaction anonymously and the other, public and allows to authenticate it since it is accessible to all.
Hash functions, used in computer science, allow the rapid recognition of files, data, images, etc. by assigning a digital fingerprint that translates into a unique character string. In the Blockchain, they are used to ensure the confidentiality of transactions, but also the integrity of the information they contain. Indeed, it is a one-way function since the calculation of the inverse function of the Hash value is theoretically impossible, their modification whether intentional or not, is also impossible. The initial data is therefore unrecoverable.
The word block in the name of this technology refers to the concept of aggregation that it uses and which consists of assembling in a block all the transactions made in a certain period of time. The block is then subjected to a validation process that most often involves solving complex algorithmic problems as it passes through a network node. The block is then added to the blockchain and becomes visible to the entire network.
This technology can differ depending on the level of decentralization and autonomy desired, as well as the use one wishes to make of it. Generally speaking, it is used for three reasons: Asset transfer, authentication and traceability. Its applications are however numerous:
Its best known use remains the transfer of currency popularized by the rise of Bitcoin and other classes of cryptocurrencies in recent years. The Blockchain allows to carry out currency exchanges in a quasi-instantaneous way in addition to minimizing the costs associated with these transactions. It could also be integrated into the activities of financial institutions which, by eliminating intermediaries, would see their operating costs drop considerably.
Smart contracts, as the name suggests, are programs that perform the same function as traditional paper contracts without the upstream logistics or intervention of any third party. Smart contracts would give access to confidential data to the signatories with the agreement of the contractor in a completely autonomous, secure and confidential way. Depending on the nature of the contract (e.g. lease, will,…), an arbitrator can be involved who will have the right to intervene in case of breach of contract or under certain clauses of the contract. This application seems to be the most promising one and may significantly change the current procedures, as it will solve many problems such as delays in the processing of claims, conflicts concerning the settlement of damages, etc.
With the advent of smart and connected devices in users’ daily lives, the Internet of Things (IoT) is subject to cybersecurity issues. To protect users’ personal data, several companies have integrated Blockchain technology into them. The addition of decentralized authentication methods with limited access makes these devices much less exposed to cyberattack attempts.
Other applications of the Blockchain, notably for information traceability purposes, can be applied to different fields. An example would be the health sector. Whether it’s easier access to patient records between different providers and hospitals or tracking dosage, the Blockchain allows for secure sharing to authorized entities which would reduce time and inefficiencies in this industry. Another example would be in logistics in supply chain tracking. Several multinationals such as DHL or Amazon have already integrated this technology into their operations. By coupling it with IoT, the industry could greatly benefit from the Blockchain by allowing real-time tracking of products, their status and quality. This would ensure easier communication with suppliers/customers, better transparency and bottleneck management. Blockchain technology has also made its way to the art with the advent of NFTs in particular. By allowing the uniqueness of digital works, their digital trade becomes possible.
With its authentication and traceability properties, the use of the Blockchain becomes applicable to governmental activities and even during elections. Any field involving heavy bureaucracy lends itself well to the integration of this technology. It can also be a solution to issues of copyright and property protection in general.
The applications of blockchain are numerous and above all, they respond to a need and to issues raised by connectivity and the digital environment. Blockchain is much more than just the technology behind cryptocurrencies and its use seems promising in many industries.
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