For the past few years, blockchain technology has most commonly been associated with cryptocurrencies. This is because the way blockchain technology works is a method often used by cryptocurrency businesses like Bitcoin and Ethereum to help track transactions and block any fraudulent action.
But blockchain technology is far more valuable than just to be used by cryptocurrencies. Its technology is capable of much more than just that, so what benefits does blockchain technology offer that help solve some of the biggest real-life problems we face today?
Here we are going to look at blockchain technology and all of it’s benefits that could be exploited to help out other glaring issues that need addressing.
We are going to prove how blockchain technology can go beyond finance and use it’s unique system to solve a lot of real-word challenges.
What Is Blockchain?
The key to understanding how blockchain technology can help solve other real-world problems is to understand what blockchain is and how it works.
Blockchain is a way of storing data using a decentralized system. Most databases and systems use a centralized system to store and back up data, meaning that everything is saved onto just one centralized database.
Blockchain challenges that by saving identical copies of the data on multiple databases all over the world.
This is why blockchain is called blockchain – it saves the identical data on multiple databases called nodes and each node serves as a link in a chain.
The term block comes from the data itself which is also called a ‘block’. The more blocks that are added to a node, the more links there are in the chain.
The main benefit of this system is security. Blockchain technology cuts out the need for a third party, plus if something happens to one database (such as a cyber attack or failure) the information is backed up on many other nodes.
This means that transactions and valuable information like the transfer of assets can be securely stored and is less likely to be lost or tampered with.
This is another benefit of blockchain technology – the ability to reduce the amount of errors with the data. Because the data needs to be verified on multiple nodes, the data is constantly being run through the system which means it is more likely to pick up any mistakes or errors.
In cryptocurrency, this means that it can stop the same transaction going through twice, it can stop the same coins being used in multiple transactions, and stop any fraudulent transactions.
However, some say that blockchain technology is not perfect because it consumes a lot of energy which has an environmental impact.
In a world where sustainability is a huge concern, a lot of companies are holding back from using blockchain technology because it consumes a lot of energy to run.
For example, Tesla stopped taking Bitcoin as a form of payment because the company claimed they were concerned about Bitcoin’s effect on environmental change.
Despite this, blockchain technology has a lot of potential. It is a unique way to look at securing blocks of data using a decentralized network, so what other ways could blockchain technology be used to benefit other networks?
Number One: Real Estate Fraud
Everyone knows that trying to purchase a house or land in this economy is an absolute nightmare. No longer is being able to put down a deposit enough – you have to be able to shift through huge amounts of paperwork, background checks, references and cut through a lot of red tape just to get even close.
The whole process of buying property is long, complicated, and even further tiring before you even add in issues like fraud.
A growing trend is that houses are being sold when they are not legally owned or rented out online using your home’s information.
So – how can blockchains help solve all of the problems facing the real estate industry today?
Digitalizing property assets and storing them in a blockchain makes them untouchable so no fraudster can tamper with your details or use them for illegal reasons.
Plus, transactions involving your assets are then stored for future references and provide an incontestable trail of the transfer of ownership from one person to another.
This means that once you own a property, the record will always be there to prove that you own what you own. Paperwork can get lost, damaged, or stolen – but because the data containing proof of ownership is backed up on many computers, it becomes immutable.
This can then be coupled with the use of smart contracts to completely cut down on paperwork and legalities. No longer would you have to shift through piles of paper just to prove you own this property – the blockchain will provide you with all the evidence you need.
Number Two: Patient Data Protection
It seems like every other day there is a news story about a hospital database going through a cyber attack and losing the confidential details of thousands of its patients.
This is not an issue just in the US – countries like the UK and Australia have had similar problems where data breaches in hospitals and medical clinics have resulted in important data like patient and health care information being stolen.
Patient data is incredibly important and needs to be easily accessible to doctors and nurses so they can provide the best quality of care possible.
However, all of this valuable data also needs to be secure and protected against cyber attacks and those who would use the data for their own personal gain.
Blockchain can help tackle both these issues. By using a decentralized database of patient data, all hospitals and medical professionals can access the data to view it. However, they would not have control over the data and it would not be centrally stored in the hospital’s database.
This means that when you switch hospitals or even move countries, there will always be a backup of all your files and medical history available. If information is lost, your new doctor can still access them on the blockchain.
As for security, blockchain has a feature that allows data to remain private by concealing certain aspects that can only be accessed through the use of a private key. This means that patient info can be kept private until a doctor uses a private key to see the files when they need to.
The patient can also keep hold of the private key so they can allow people they trust (such as staff at their hospital) to access the files.
This helps protect patient data all through a single system – blockchains.
Number Three: Identity Theft
Remember earlier when we said that houses were fraudulently being sold online by people who did not even own the property?
One such case happened in the UK when a man went away on vacation only to return to find someone else living in his home.
When he called law enforcement, they claimed that a crime had not been committed by the new tenants because they had legally bought the house – the original owner had had their identity stolen, their house sold using their name and details. So legally, his house had been sold.
This is just one awful example of how identity theft can ruin lives. It’s a serious issue and one that is being reported again and again all around the world.
Data concerning your passport, driver’s license, social security – it is all used and stored in centralized databases, even government owned databases.
The security of these databases pale in comparison to the decentralization of blockchain’s system, which is a far more secure way to store data.
One way blockchain does this is through the use of the private key. As mentioned in the section about patient data protection, certain aspects of data can be concealed and only be accessible to those with a certain key.
This way, your data can be backed up using decentralized databases but can only be accessed by yourself and those you trust or those you give permission to.
This will make it nearly impossible for your identity to be stolen – and if it is, you can track down those who have access to your key and find your culprit.
It’s kind of like giving someone the key to your house – and if your house is robbed and the cops say the culprit used the key, you can then track down those who have a copy of the key to your house and retrieve your belongings.
In simpler terms, blockchains lock away your personal information and only allow those with access to view that data – unlike with centralized databases that can be hacked by anyone and your data is then exposed for all to see.
Number Four: International Transactions
Making online payments within your country’s borders can be stressful enough – but making payments that go beyond your country’s borders? Forget it.
This process is not impossible but it is so time consuming, difficult and insecure. There are often multiple steps you have to take, verifications you have to sit around waiting to go through, and sometimes you can even be charged for the payment to be completed.
This means that trying to make international payments through your bank is something a lot of people avoid and this could mean you could end up missing out on a lot of great deals and transactions.
So how does blockchain help solve this frustrating process?
By streamlining it and cutting out the third party middlemen that charge transaction fees to take over transfers and verification. This can also cut down on delays and allow your payment transaction to be confirmed more quickly.
Another plus is that the transaction then gets recorded immediately and you have evidence that you made the payment.
If there is ever an issue, such as the payee claiming they never received payment, you have evidence to prove that the transaction was a success and that they owe you what you paid for. This allows for greater accountability and also better security than with a centralized system.
And this leads into our next point: using smart contracts to carry out agreements between two parties.
Number Five: Contracts And Agreements
If you have ever signed a contract, such as a tenancy agreement or a prenup, then you know that the process is a long and expensive one.
It can take a while for a contract to be drawn up and this process often comes with huge administrative costs and amounts of paperwork.
This can be a waste of resources, especially when intermediaries are involved. Lawyers can make a lot of money charging you all kinds of fees while completing paperwork and cutting them out can save you time, money and stress.
However, the reason why we hire lawyers for such things is because they know how to cover loopholes and legalities – so how can we make a contract that is binding yet cuts out all the issues linked with traditional contracts and agreements?
The answer is to replace them with smart contracts. Smart contracts are basically lines of code stored on a blockchain. They are programmed to execute certain actions to ensure that the terms and conditions of the smart contract are met.
These lines of code are easily stored on a blockchain which means they cannot be altered or manipulated – plus, they can be stored on a public key so everything is out in the open to allow for greater transparency.
This method also cuts out the need for intermediaries like lawyers so you can save on those hefty administrative fees.
Number Six: Copyright Issues
Copyright infringement and piracy are some of the biggest causes of industry loss and even large multinationals such as Sony are constantly locked in battles regarding these issues.
But it’s not just media industries that are always suffering from issues around copyright. Music businesses, sports, manufacturers – all industries suffer in some way due to copyright infringement and illegal distribution.
This is because of the reliance on hard-copy formats which is unavoidable with industries that involve equipment and physical products, but companies still produce items like CDs and DVDs which contain a hardcopy of their product.
However, digitizing these industries and moving them to streaming platforms makes it far more difficult for piracy and copyright infringement to take place – and blockchain can also help prevent these issues from occurring.
Blockchain allows its users to digitize their content and create information like timestamps and intellectual property rights on ledgers.
This means that a music creator can copyright their content so when copyright infringement happens, they will be immediately notified and can take legal action.
As well as this, blockchains are capable of recording when the content is accessed so it creates an easy to read history of that content, who accessed it and when to help find the culprit.
As you can see, there is a lot of potential for blockchain technology outside of cryptocurrency and NFTs. Its ability to create secure and non adjustable tracking allows for extra security and more transparency than a traditional single database systems can ever provide.
Using decentralized databases with blockchain technology allows you to keep track of those who access your information and protect it entirely from piracy and theft. This means you can protect yourself and your assets, reducing your chances of being a victim of crime.
Blockchain technology still has a long way to go before it will take over traditional systems in everyday use, but the future’s looking bright with several multinationals and industries already developing solutions with blockchain technology.