At a start-up mela in the mid-2019 at Bengaluru, I was fortunate enough to attend a masterclass on blockchain by a now-ubiquitous cryptocurrency startup, then still in its infancy. It was a one hour class, with a variety of jargons thrown around like, hashcash puzzles, consensus algorithms, transaction blocks et all. At the end, we trooped out with a profound this-is-the-future beam on our faces. I was still dumbfounded, and grabbed an acquaintance who was sitting next to me in the class and asked him, “Hey, can you just give me a gist of blockchain and its uses”. He gave a quizzical look and then muttered “ Well, I’m also not fully sure, must read about it later online”.
The term Blockchain has become like how the term Big Data was in the 2010s. Most had heard about it, were confident about its immense potential and prospective applications, but were unsure what it actually meant or how it can be applied in business. This post here, ergo, serves to simplify this term Blockchain, and will endeavor to give a layman’s perspective on how it applies to different businesses.
Blockchain, per its deconstructed nomenclature, is a connected chain of blocks, with information in each block linked to the next one through cryptography. These blocks are analogous to an accountant’s ledger book, which maintains a list of transactions in a defined order, with multiple inter-connected ledgers recording the transactions simultaneously. Blockchains are a chain of blocks where every block holds some piece of data within it. The Blocks are also spread across a network of computers called nodes which all have the same record of each and every transaction. So instead of one company or a database which holds all the information, now the information is spread across the whole network. Hence the reason for calling a Blockchain decentralized. Transactions are not governed by a single party, but rather the entire transaction history is recorded in a decentralized, immutable, distributed ledger.
Blockchains are not spelt as BITCOIN
One of the prevailing misconceptions around this technology is that blockchains are generally considered as a cryptocurrency, and/or more than often, are interchangeably used with the term Bitcoin. Bitcoin is a cryptocurrency, while blockchain is a distributed database. Bitcoin is powered by blockchain technology, but blockchain has many applications beyond Bitcoin. Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology is used. A cryptocurrency is a medium of exchange, like any other fiat currency, but is digital and uses encryption techniques to control its creation and to verify the transfer of funds, drawing on the same principles of blockchain.
Applications of Blockchain
Blockchain applications are not limited to just cryptocurrency and bitcoin. The innate capabilities of transparency and truth while also saving businesses time and money, the technology is making waves across various sectors in ways that range from streamlining financial transactions to ensuring complete traceability across different supply chains.
Some of the other effective and practical applications of blockchain include, but not limited to, supply chain monitoring, payments processing, retail loyalty systems, digital profiling, medical profiling, contracts & Agreements, data Backup and sharing, food safety & authenticity.
Across the world, we have many prototypes among the above.
One key application of blockchain which has caught the attention of many MNCs and Fortune 500 companies across sectors is the aspect of traceability across the value chain. A recent study in Harvard Business Review (HBR) across seven major US corporations who lead the supply chain industry showed that blockchain based record keeping can greatly improve value chains by enabling faster & more cost-efficient delivery of products, enhancing products’ traceability, improving coordination between partners, and aiding access to better financing and loans. In India as well, we see that this is gaining a lot of momentum especially in the food industry, specifically meat, dairy & organic food products’ traceability.
The ability to instantaneously trace the entire lifecycle of food products from origin through every point of contact on its journey to the consumer bolsters credibility, efficiency and safety. Nestle, for instance, has embarked along with IBM to create a traceability system for their baby products, which gives parents an absolute confidence in the provenance of not just the product per se, but also the origins of the ingredients which go into making the same.
Take milk next, for example. Dairy products are one of the most consumed food categories all over the world. Understanding where the raw milk came from, the quality parameters, location of the processing plant, its storage metrics etc. all serves not just to bolster confidence and trust at the consumer’s end, but also helps the companies themselves to identify lacunae in the supply chain and make better decisions.
Similarly, in the meat industry, research shows that consumers are more and more interested in knowing the origins and manner in which their meat products are sustainably manufactured and processed. Blockchain technology, along with AI algorithms can effectively give the provenance of the meat and its quality both to consumers and other actors in the supply chain in one click.
So, in epilogue, we can say that blockchain technology is still a work in progress and their applications are innumerable. As a business owner, one can look at the suitable use cases by which blockchain technology can pertinently address their pain points and can effectively employ the same. The global business world is still grappling with intricacies of the Blockchain technologies and its relevance to their businesses.
While the debate still rages whether blockchain heralds the second coming of the internet, one can safely say that in the next few years, its prominence and relevance across industries will increase manifold.
Found this interesting? Do check out the solutions offered by Chainflux by clicking the other links to the use cases we have developed using blockchain technology. Chainflux has its own blockchain platform, Shine, and has done extensive work in leveraging other blockchains as well to create better solutions for businesses.
To know more about blockchain and its real world scenarios, drop us a line at firstname.lastname@example.org