For the first time in modern history, the 13 trillion dollar financial services industry is being modernized. Blockchain is at the forefront of this revolution
The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. With blockchain technology, the web gains a new layer of functionality.
Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain. The blockchain gives internet users the ability to create value and authenticates digital information.
No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on a main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.
Two important properties result from this:
• Transparency data is embedded within the network as a whole, by definition it is public.
• It cannot be corrupted altering any unit of information on the blockchain would mean using a huge amount of computing power to override the entire network.
Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.
Blockchain technology is like the internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain cannot:
Be controlled by any single entity.
Has no single point of failure.
Revolution is the right word for blockchain technology because it is not necessarily about certain companies gaining the advantage but, at least potentially, about broad benefits being felt across multiple sectors. By now most of the business world know that blockchain is something they need to be paying attention to, but how many really know what this revolutionary technology is all about and how it will change the way their industry operates?
A new industry has arisen known as blockchain. It is a global peer-to-peer platform for identity, reputation, and transactions. Every business, institution, government and individual keeps records in one way or another, then consider our push into the internet of things era. We are now collecting data from anything and everything, be it an RFID-enabled supply chain or a smart buildings environmental control system. All of this data needs an organized, reliable database and blockchain offers the perfect solution.
Whether we are buying and selling, registering ownership, sending packages around the world or even confirming identities, blockchain will help us do it better. That means more efficient, more automatic, quicker, and with fewer errors; qualities that can provide clear and fundamental improvements for almost any industry that has sought to adopt it. Here are some examples:
Land Use: Ownership and history of property currently requires the investigation of many different document sources such as Grantor-Grantee index, Land Records or Deed Records. The goal is to find any records related to property liens, easements, covenants, conditions and restrictions, agreements, resolutions and ordinances. This is a time consuming and laborious process in which it’s easy to miss important information. Companies are starting to use blockchain to track land registries. There will be reduction of fraud, eliminating paperwork and accelerating the process.
Identity: Across the globe we use passports to identify people, which are paper-based identity cards similar to your driver’s license and therefore counterfeitable. In 2013, almost 40 million “travel” documents were reported as lost or stolen since 2002, according to Interpol. Dubai is working on a digital passport with a London-based company called ObjectTech. The digital passport is based on Blockchain. “This is an identity that is fit for the digital age. “Not only will it make international travel quicker and safer, but it also gives people back control of their personal digital data.”
Global Logistics and Shipping: Automating and streamlining container logistics operations and moving containers from point to point often involves more than 30 different parties, including carriers, terminals, forwarders, haulers, drivers, shippers and more. This process results in hundreds of interactions between those parties, conducted through a mix of e-mail, phone and fax.” Companies are investigating blockchain to track global trade and shipments.
Aviation: Through the lifecycle of the engine, the original parts, the replacement parts and configuration are all being tracked, and it is being done by a number of different companies. Blockchain is in effect a single federated ledger that everybody who uses and touches that engine could use it as a single point of truth of what has happened to the engine.
Manufacturing: The manufacturing industry uses QR codes and bar codes to identify products. These methods are notoriously insecure given the ease at which someone can copy or duplicates these codes. The imports of counterfeit and pirated goods are worth nearly half a trillion dollars a year, or around 2.5% of global imports. Imagine if luxury goods were tracked in an immutable blockchain.
Prescription Drugs: Worldwide sales of counterfeit medicines could top US$ 75 billion this year, a 90% rise in five years. There arises a dire need to ‘develop an electronic, inter-operable system to identify and trace certain prescription drugs as they are distributed worldwide.
Finance: Visa has a blockchain effort called "Visa B2B Connect" partnering with Chain to analyze the possibility of optimizing near real-time funds transfer system for high value bank-to-bank and corporate payments. A company called Ripple is working with banks to optimize how they send money around the world, with the goal of new revenue models, lower processing costs and better overall customer experience. IBM Global Finance is working on one of the largest blockchain implementations.
Government: The US Navy’s Naval Innovation Advisory Council (NIAC) will spearhead the testing of Blockchain technology in their 3D printing in order to help securely transfer data during the manufacturing process.
Banking: According to an Accenture survey, “Nine in ten executives said their bank is currently exploring the use of Blockchain.” Some of the focus is on transforming payments at scale and reducing the risk of failure.
Blockchain as a Service: Several enterprise software vendors have announced Blockchain as a Service offerings in which customers can leverage blockchain in a cloud environment.
So in each definition the focus is on an incorruptible record keeping system, transparent by being public and un-hackable due to its distributed nature. Blockchain is not just about financial record keeping, it has demonstrated its potential to enhance the management of almost all databases, making it a disruptive force in a broad spectrum of sectors.