Blockchain technology has gained massive acclaim and hype over the last couple years. While the tech is relatively synonymous with cryptocurrencies likes Bitcoin, Ether, and various other digital monies, its abilities lend revolutionary new capacities to a plethora of industries and verticals.
While the technology is by no means fully developed or understood in terms of its potential applications, the immutable system possesses great ability to transform much of business and governmental operations. This notion is founded in the many places and various ways it is experimented with and applied today.
To help shine a light on blockchain technology's far-reaching implications, here are several ways in which blockchain is currently used outside the realms of cryptocurrency.
Creation of Smart Contracts
Smart contracts are not a new concept. In fact, the notion was first proposed by Nick Szabo in 1994, long before blockchain technology had been conceptualized, let alone created.
". . . New institutions, and new ways to formalize the relationships that make up these institutions, are now made possible by the digital revolution. I call these new contracts "smart", because they are far more functional than their inanimate paper-based ancestors. No use of artificial intelligence is implied. A smart contract is a set of promises, specified in digital form, including protocols within which the parties perform on these promises."
Szabo's idea would come to fruition over a decade later, thanks to the creation of blockchain technology. Based on - and founded within - this system, smart contracts are digital versions of their paper-counterparts; legally-binding, programmable digital documents.
Under this digital paradigm, smart contracts detail a set of obligations and limitations for an agreement to operate within. However, when the contract's terms have been met, a third-party system releases the necessary funds, thereby eliminating the need for human intervention, and folly.
The autonomous nature of these contracts breeds a new model for legal systems and business agreements to be virtuously implemented and adhered to.
Augmented Cybersecurity and Identity Authentication
Cybersecurity is a major issue in today's world, wrought with complex and difficult-to-solve concerns.
Blockchain technology provides a potential solution to many of the related problems as the system enacts a protocol in which communications are transmitted and verified through intricate cryptographic methods that confirm data as coming from an expected and trusted source.
Using a sophisticated set of authentication rules and regulations, a Keyless Signature Infrastructure (KSI) verifies transactions as authentic. This methodology is extremely stable and greatly diminishes a hacker's ability to intercept sensitive information as it utilizes code which grants or denies access to data based on a command's source. Major corporations like Verizon have implemented blockchain technologies in this way.
Furthermore, this system provides greater transparency and trust around digital identities through its immutable and secure structure. This means that businesses need not continue to rely on easily-hacked passwords stored in central (aka highly hackable) servers. This is because blockchain technology presents authentication hurdles on public key cryptography; this ensures that a transaction is enacted by the expected key.
A Decentralized Notary
Part of what makes blockchain technology so secure is its timestamping feature. With this, the entirety of a network validates a piece of data, and then records that validation across all nodes within the system at a certain time.
This simple, automatized element serves to confirm the existence of something (an asset, interaction, etc.) or that an action took place at a specific time. Because of the blockchain's immutable nature, this can be used for verification purposes in a court of law.
In the past, this was only through a notary public that such proof could be presented. However, as the Argentina-based developer and creator of Proof of Existence, a cryptographic notary service, Manuel Ar‚Äö√†√∂¬¨‚àûoz, stated:
"As the blockchain is a public database, it is a distributed sort of consensus; your document becomes certified in a distributed sort of way."
Distributed Cloud Storage
One area which blockchain will almost certainly cause major disruption in is data storage. Currently, cloud store is massively popular and presents better security options than other alternatives. Despite this, it is by no means un-hackable. There have been numerous cloud security breaches that resulted in massive losses.
Part of what makes cloud storage insecure is its centralized nature. This means that user must entrust a single governing entity with all information they store in its system.
Using blockchain technology, however, the cloud can be decentralized, and therefore, much more secure. One startup, Storj has created a blockchain-based cloud storage system that presents unparalleled security when compared to more traditional alternatives. Additionally, the company allows its users to rent out excess storage space, thereby creating a new marketplace.
The fact is that any company can store data for a fee; the key to prosperity with this model is hashing and decentralized storage, effectively minimizing the threat of a security breach.
This threat can be mitigated, however, with the implementation of blockchain's indelible, immutable, and virtually un-hackable dispersed system. Startup like Follow My Vote are hard at work to make this notion a reality, helping to protect democratic systems everywhere.
Blockchain technology has a long way to go before its full potentials can be unlocked. Over the next several years, there will surely be tons of experimentation and implementation in various industries to help understand where its talents are suited best. Keep your eyes open as some truly interesting and disruptive developments are about to take place. About the Author: Heidi Yu is a serial entrepreneur, influencer marketing evangelist and AI enthusiast. An MBA graduate from Seattle University, she successfully founded Boostinsider at the end of 2014. As one of the few women leaders in blockchain adaptation, Heidi founded BOOSTO, an influencer driven decentralized app store that returns power to creators and makers. Heidi speaks to audiences around the world about the adaptation and the benefits of the blockchain.