By Raam Baranidharan, Vice President, Infogain
The current downturn in crypto markets has led to people questioning the crypto ecosystem. However, the building block of the crypto ecosystem – blockchain – is here to stay and its applications are continuing to abound.
Blockchain has emerged as one of the key technology innovations over the last few years.
Blockchain is a shared distributed ledger that can store data ensuring immutability and anonymity. Once data is stored on a blockchain it cannot be tampered with. A few intrinsic properties of blockchain are:
- Immutable: Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree). It ensures that data, once recorded, cannot be altered unless the entire chain is altered – which is not computationally feasible.
- Distributed (Decentralized): The blockchain represents a distributed network of nodes that share the ledger. Public blockchains are also decentralized, which means that anyone can host a node and join the blockchain network.
- Unanimous: All nodes in the blockchain network agree on a block before its recordedon-chain, ensuring a common view of data.
- Anonymous: The identity of the participants is anonymous or pseudonymous.
- Traceable: While identity is secure, all actions on blockchain are traceable.
With smart contracts we can now expand blockchain’s capabilities to beyond record keeping and creating coins. Smart contracts enable a plethora of use cases that can revolutionize several industries.
Blockchain can significantly simplify cross country currency exchanges. It provides a tamper-proof and quick transfer of funds across countries. Additionally, several countries are moving towards blockchain-based CBDC (Central Bank Digital Currency) using Blockchains like Hyperledger and Corda.
Metaverses represent the next level of Digital engagement with Gartner predicting that 25% of people will be spending at least one hour a day in a Metaverse by 2026. Blockchain-based metaverses enable an ownership economy that incentivizes users to earn while they spend time. Decentraland and Sandbox are examples of popular blockchain-based metaverses.
Blockchain is driving several innovations in the supply chain industry. Blockchain can provide enhanced visibility into the supply chain process also guaranteeing that the data recorded on the blockchain is not tampered with. Its decentralized and distributed nature ensures that all stakeholders see reliable, trustworthy data as soon as its recorded. This has the potential to significantly improve the accuracy of data stored, improving the overall efficiency of the supply chain.
Blockchain supports tamper proof, immutable data storage enabling greater transparency in all areas where documents must be stored securely. For example, property records can now be stored securely in a blockchain-based solution which will radically change how real estate is managed. Sweden is testing a blockchain-based land registry; identity and healthcare are other areas where blockchain can be used to securely store data.