Satoshi Nakamoto invented Bitcoin back in 2009 and introduced blockchain technology to the world. Since then, most experts agree that the potential for new businesses and applications built on distributed ledgers is sky-high. The technology has been around for more than a decade now and has been heavily hyped.
However, the world is still waiting for that breakthrough year when blockchain moves from a tech-oriented focus to widespread adoption.
What is blockchain?
Imagine you are out shopping and when you try to pay with your card, it doesn’t work, because for example, your bank had a computer meltdown and its clients cannot use their cards for an unknown period of time.
Now imagine that the cash register had access to a record (ledger) of the balance on your cards which is updated anytime you bought something. You’d still be able to use your card, because the cash register would know your balance.
That is just one of the possibilities the distributed ledger, also known as a blockchain, offers. It sounds quite convenient, however, it is still hardly used in practice.
Where is blockchain used?
Blockchain is still primarily used for powering cryptocurrencies, such as Bitcoin. The blockchain is a ledger, or log, of every Bitcoin or other crypto transaction ever made and users on the network collaborate to verify new transactions when they occur – an enterprise known as “Bitcoin mining”.
It has long been argued that this could be better than traditional databases.
Distributed ledger system could also be used to keep track of certificates and degrees issued by universities. Copies of the ledger would be held by multiple parties and individuals would be able to verify that records of their own qualifications were accurate, without holding any organisation responsible for this.
Big businesses worldwide have been incorporating the technology into their operations.
Danish shipping company Maersk uses it in TradeLens, a new system for tracking customs documentation on goods that are shipped internationally. Thai crypto company Zcoin developed a blockchain-based system that allows members of the Thailand Democrat Party to cast digital votes for their new leader in late 2018. Instead of trusting a central authority to count the votes, they were instead collected on the Zcoin blockchain.
Big companies like Amazon, IBM and Walmart use blockchain in supply chain, data management and project administration. Banks are also looking into integration of blockchain technology to implement transparency of transactions: in this case, they will not need to radically change existing processes. If compliance and KYC (Know Your Customer) procedures are unlikely to be fully automated, then transparency of payments using distributed technologies could become the norm in the industry.
Many brokers started using Bitcoin and other cryptocurrencies as a payment method as well. Multi asset broker Exness uses Bitcoin as a deposit and withdrawal method. Tether is another crypto payment method they use.
What comes next?
More and more people nowadays say that eventually blockchain-style systems will prove to be the most efficient option for organising data at scale.
Stanislav Bernukhov, crypto expert at Exness, commented:
One of the main features of blockchain technology is transparency, which makes funding blockchain projects easier. Bitcoin, which is used as a flagship cryptocurrency for the industry, is becoming trustworthy over time – we could see that it was robust enough during the market crash in 2020. On the other hand, the fiat monetary system experiences difficulties – interest rates for major economies are at the lowest historical levels, and debt yields are not attractive for the capital, so more and more capital will flow into the blockchain industry. Of course, the regulatory landscape needs to be changed accordingly.
So far, blockchain might not have changed the world – but it has got a lot of people thinking about it.
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