Last time we talked about the blockchain that has emerged from Bitcoin technology, and we discussed a bit about how it works. However, Blockchain technology is being employed in many more ways than just cryptocurrencies. In a recent article in the New York Times, Nathaniel Popper writes, “In the first three months of 2018, venture capitalists put half a billion dollars into 75 blockchain projects, more than double what they raised in the last quarter of 2017, according to data from Pitchbook.”
Many think blockchain technology is poised to be the most technologically revolutionary concept since the Internet was invented. That notion has merit considering the scope of applications that may be affected. Certainly, any software system that uses a database could potentially be affected. Applications that require transaction histories, identity protection, or proof of ownership are other potential candidates for blockchain technology.
According to blockgeeks.com, “This decentralized blockchain system is going to change your life from the way you transact business or manage assets, to the way you use your machines, vote, rent a car, and even prove who you are. Along the way, it will transform banks and other financial institutions, hospitals, companies, and governments among others.”
Here are just a few of the areas where blockchain technology is being developed:
|Data Storage||Blockchain technology has application in cloud data storage, removing the need for a central repository. Ameer Rosic, writing for the Huffington Post says, "Blockchain data storage will become a massive disruptor shortly. (3-5 years). Current cloud storage services are centralized — thus you the users must place trust in a single storage provider. “They” control all of your online assets. On the other hand with the Blockchain, this can become decentralized."
A service for this purpose already exists, and if you have available storage space, storj.io will pay for that storage in their cryptocurrency which can be exchanged for other cryptos or USD. Files stored in this manner are shared across multiple nodes, and each file part is stored on multiple nodes. This ensures that if a node goes down, users still have access to their files. It's an interesting model and hints at similar services to come.
|Smart Contracts||A smart contract can be thought of as a contract that also has code that executes when certain events occur. From Wikipedia, "a smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract."
• A traditional contract spells out the details of what should happen and when, and a smart contract has the ability to facilitate that process. A common example often sited is that of a vending machine. When a buyer puts their coins into a vending machine and presses one of the selection buttons, the expectation is that the chosen product will be presented.
• A smart contract scenario is similar in that the contract is designed such that a cryptocurrency is sent by the buyer to the smart contract address and the product is presented or released on or after a specified set of milestones have been met, including a suitable number of nodes having validated the transaction. If the product is not presented, funds are returned. Use cases are as broad as the concept of a contract itself.
|Decentralized Notary||Blockchain technology is already being employed to verify documents. In his article for the Huffington Post, Rosic states about the blockchain, "As a trustless decentralized network, it essentially confirms the existence of [something] at a stated time that is further provable in a court of law." He cites the Proof of Existence (poex.io) website as an example of this in use today. Their site explains, "The document is certified via embedding its SHA256 digest in the bitcoin blockchain… Once the transaction is confirmed, the document is permanently certified and proven to exist at least as early as the time the transaction was confirmed."
The document itself is not stored in the blockchain, but enough information about the document and its existence at a specific point in time is recorded. In this case, the Bitcoin blockchain is used, and initiating a transaction requires a small fee in the form of bitcoin. Similarly, originstamp.org offers the same service for free, relying on user donations to cover the costs of operation.
|Supply Chain Management||Currently, supply chain management commonly suffers from a lack of transparency and distribution complexity that makes verification, sourcing, investigation, and efficiency improvements very difficult. Use of blockchain technology solves many of these issues.
In an article for Techcrunch.com, Ben Dickson writes, "A simple application of the blockchain paradigm to the supply chain would be to register the transfer of goods on the ledger as transactions that would identify the parties involved, as well as the price, date, location, quality and state of the product and any other information that would be relevant to managing the supply chain."
Products would be tagged or marked in such a way that they can be identified at each point along its distribution network and recorded in the blockchain. All vendors would have access to the distribution record, ensuring transparency and trust is established by the decentralized nature of the blockchain; no single authority has control of all the information recorded about a given item. Locating unreliable vendors, investigating incidents, ensuring accountability, and many other supply chain management issues are potentially mitigated with blockchain use.
|Food Tracability||Similar to supply chain management, blockchain technology holds promise in food traceability as well. According to Roger Aitken in his article for Forbes.com, titled IBM & Walmart Launching Blockchain Food Safety Alliance In China With Fortune 500's JD.com, "During a pilot program conducted with Walmart, testing found that by applying blockchain to trace food cut the time it took to trace a package of mangoes from the farm to the store to just two seconds - from days or weeks." He later writes, "Traditionally this has been challenging due to complex and fragmented data sharing systems that are often paper-based and can be error-prone."
This could reduce the cost of shipping and also improve product safety. Finding the source of an e-coli outbreak, for example, would be greatly expedited
|Healthcare||Patient records often do not carry through the many different medical systems a patient may need. At best, this can cause delays in treatment, and at its worst, this problem may result in the patient not receiving the treatment needed, or even the wrong treatment may be given. In 2016, the Wall Street Journal reported that researchers had found medical errors to be the third leading cause of death in the United States.
Blockchain technology is being employed to address this significant issue. Randy Bean writes for Forbes, "Blockchain offers the possibility of creating a reliable place to track the changes across systems in a manner that gets around many of the concerns associated with data integration between proprietary systems. In effect, blockchain becomes the unifying glue that holds together a highly fragmented healthcare record."
There are many hurdles to overcome in employing this new technology. Disparate systems need to be modified to communicate in a standard that has yet to be fully developed, and established paradigms change slowly, especially if there is money to be made keeping things as they are. Nevertheless, the advantages of blockchain use in handling patient data are clear, and efforts are underway to adopt this technology.
|Voting||In March of this year, Sierra Leone ran the first public election using blockchain technology. Well, sort of. Actually, voters in the election used traditional paper ballots to cast their votes. Representatives for Agora, the company that developed the blockchain voting technology used, were shown the cast ballots at several polling stations, and the representatives recorded those votes in their proprietary blockchain.
This was intended as a sort of proof of concept. Agora hopes that one day soon, voters will be able to use their personal devices to cast their votes directly into the Agora blockchain voting system. In his article for FastCompany, Steve Melendez notes, "ballots would be anonymized, encrypted and submitted to Agora’s network, using mathematical functions that would let auditors confirm individual votes were preserved without being able to detect how [specific] people voted, according to an Agora white paper." There is still much to be worked out, not the least of which is how to deal with malicious software that may reside on a voter's device or DDoS attacks, but the technology holds promise.
These are just a few of the many uses of blockchain technology in development today. Many corporations are beginning to invest heavily in blockchain technology services, including IBM, Microsoft, Oracle, Amazon, Google, JP Morgan Chase, and Bank of America to name a few. As the many advantages of blockchain technology become increasingly clear, manufacturers and technology professionals in many disciplines are leveraging the technology to improve efficiencies, add transparency and trust, increase reliability, and enhance security. This technology is still in its infancy and just like the Internet and the World Wide Web, the early days of the technology may only hint at what is to come.
Stay tuned for our next article that will focus on how we may test the technology. It’s had a few major fails in the headlines – how can we ensure this doesn’t happen?