Blockchain was first mentioned in the 80s, and it saw some of its first implementations in the decades after. However, one of the largest breakthroughs of this technology happened in 2008, after Bitcoin whitepaper was published.
The founder of Bitcoin, Satoshi Nakamoto, improved upon the concept of blockchain and made the first decentralized blockchain. Since then, blockchain technology has been popularized through its use in cryptocurrencies.
Although blockchain is present in thousands of cryptocurrencies, experts have seen its potential in other industries as well. Healthcare, video games, legal services, and many other fields have started to adopt blockchain in order to improve their security and operations.
The blockchain technology impact is yet to unfold in the following decades, and this article will try to breakdown it’s current implementations, and what we may expect in the future.
Blockchain technology explained
Imagine a ledger for any type of business. You did, okay, now imagine what would happen if someone stole it, altered information, or simply copied it for their purposes. A blockchain is a digital ledger where these risks simply aren’t present.
Data is decentralized and distributed across multiple computers, where each one ensures integrity and security. No change can be made without being approved by other computers, in other words, nodes, in the network.
Blockchains are a peer-to-peer network rather than a hierarchy, and no entity is above others. Not only is the network decentralized, it’s also transparent, allowing everyone to take a look at transactions that have occurred.
The blockchain adds each block immutably. Altering the data is impossible, and undoing transactions can’t occur. The network will detect and prevent any changes or alterations to data, demonstrating why industries that need to protect data implement blockchain.
There are multiple types of blockchain:
- Public,
- Private,
- Consortium,
- and Hybrid
To add a new block to the blockchain, all nodes must reach a consensus. This is achieved through the so-called consensus mechanisms, with the two most popular being Proof of Work (PoW) and Proof of Stake (PoS). The most popular examples of PoW and PoS mechanisms are Bitcoin and Ethereum, respectively.
There’s a security threat called a 51% attack that’s tied to reaching a consensus. This can happen if a wrongdoer gets access to more than 51% of nodes in the network, allowing them to make alterations. However, there are numerous systems that prevent this.
Blockchain Technology Impact on Finance
Of course, one of the most important implementations of blockchain, and the one that skyrocketed it’s popularity, is in finance. Blockchain is used to verify and secure transactions between two entities.
The previously mentioned characteristics of blockchain, such as immutability, validation, and encryption, all play an important role in ensuring that transactions are executed safely and quickly.
Of course, blockchain isn’t the end-all solution for cybersecurity risks, and cryptocurrency projects should implement other methods, such as an efficient AML case management solution. This way, multiple attack areas are covered.
The amount of cryptocurrencies that we have now compared to 15 years ago just proves how big of a blockchain technology impact has had on finance. However, traditional banking institutions are finding ways to implement this technology in order to protect transactions and data.
Besides Bitcoin, blockchain is also an important part of Decentralized Finance (DeFi) projects, which offer financial services without a financial institution in-between between parties, enabling peer-to-peer lending, borrowing, and trading.
In the context of security in finance, blockchain’s key traits, such as immutability and transparency, track scammers and money-laundering activities.
Other industries affected by Blockchain Technology Impact
No industry can be compared to finance in terms of blockchain’s effect on it. However, we’re going to take a look at this innovative technology and its implementations in these fields.
In some industries, such as entertainment, blockchain technology impact is more present than in others, but we can observe a gradual increase in adoption.
Software security
Through distributing data across multiple nodes, blockchain’s cryptographic and decentralized concept allows companies to protect their software. The attack surface is smaller, and even if a risk unfolds, it’s unlikely that it will cause as much harm as without the blockchain.
Although there are already advanced systems of access management built into servers and internal networks, blockchain can help here as well. Blockchain can secure employee identities through decentralized identifiers (DIDs).
This is especially helpful in financial and crypto companies, as hacked profiles and identities can lead to all kinds of profiles, mainly hackers using them for phishing attempts. Blockchain also allows user’s to have a control over their personal data.
Smart contracts are another concept within blockchain, ensuring secure and correct execution of software code, preventing any tampering or interference.
Healthcare
Businesses apply important international data regulations such as GDPR and CCPA, regardless of the industry. However, companies in healthcare or finance need to pay additional attention to data protection, as they store sensitive and important user info.
Blockchain steps up here by allowing companies to store and manage electronic health records (EHRs) securely. It guarantees privacy and safety to patients and allows doctors to track any alterations to the records.
In terms of the supply chain of medical products, blockchain helps track pharmaceuticals from production to delivery. This minimizes the risk of counterfeit drugs while providing all involved parties with transparent insight into the path that products have crossed.
Intellectual property and copyrights
If you’ve spent even a minute on the internet in the past couple of years, it’s likely that you’ve heard about non-fungible tokens or NFTs. You’ve likely heard about it in the context of overpriced images that many people wasted their money on.
Unfortunately, this has been the case, but there’s far more depth when it comes to NFTs than this. Blockchain can provide creators with protection against theft and copyright infringement. This is done through timestamps and immutable records of the asset ownership history and creation date.
People use blockchain mainly for visual art, but they also use it for music, videos, movies, and other assets. Through smart contracts, creators can also receive royalties based on the use of their work or sales.
The problem with NFTs and the use of blockchain for intellectual property is the bad reputation it has had in the past couple of years. The misuse of this technology really had an echo, but hopefully, people will look past it and start using this technology for legitimate and helpful uses.
Video game industry
Along with art, the implementation of blockchain in video games has been notable in the crypto and gaming communities. The idea behind blockchain-powered games is that players are able to receive tokens for their in-game efforts. One of the most popular blockchain game is Axie Infinity.
Furthermore, they can purchase tokens or sell items. Everything that many games, such as World of Warcraft or Eva Online, implemented, but with the help of blockchain to make the system interoperable with other blockchains and provide players with an opportunity to earn real money.
Decentralized gaming platforms use blockchain to distribute tokens in a fair and transparent way.
Let’s say we have a video game X that has in-game assets. You decide to start playing it, but instead of grinding for hours, you use tokens earned on another game to make in-game purchases for it.
Legal and notary services
Documents are data, and blockchain’s immutability obviously applies here. By making the documents tamper-proof, blockchain makes online agreements and contracts more accountable and reliable.
Furthermore, smart contracts can serve as a way of allowing parties to sign documents without the need for intermediaries. There are some companies that use smart contracts for important deals such as purchases of houses or cars.
Blockchain is destined to change businesses
The popularity of cryptocurrencies is proof that blockchain technology has the potential to revolutionize an industry. We measure the cryptocurrency market in trillions of dollars, and we expect it to grow in the future as it becomes more prevalent. Blockchain is currently a fancy new word, and many companies are using it for marketing purposes. On the other hand, companies such as MedRec, KodakOne, Walmart, and many others have implemented blockchain and seen improvements exactly as promised.
About the Writer
Veljko is a student of information technology who paired his passion for technology with his writing skills. He enjoys researching topics such as robotics and programming and cultivates his knowledge in philosophy, classical literature, and fitness. Veljko’s favorite writers are Borislav Pekić, Miloš Crnjanski, and Ernest Hemingway.
