Five Key Uses of Blockchain Technology You Should Know About
Five Key Uses of Blockchain Technology You Should Know About
October 24, 2024
Blockchain’s use cases go way beyond cryptocurrency!
Cryptocurrency has become an increasingly popular investment class. For now, investors are primarily in it for the appreciation in value or the memes rather than for utility purposes.
Cryptocurrencies are digital currencies made up of digital code, traded as assets. Blockchain is a decentralised ledger technology that creates and stores them.
Cryptocurrency is a divisive topic. Its supporters believe it to be a disruptive technology that will change the world for the better, whereas its critics have claimed many cryptocurrencies to be Ponzi schemes.
Blockchain is the technology that creates and stores cryptocurrency. It is a type of Distributed Ledger Technology (DLT) that uses cryptography to make it difficult for malicious users to influence results in their favour.
What Is Cryptography? (Basic Definition)
Cryptography is the application of hiding information. It aims to keep information confidential and secure. Typical use cases include:
Bank cards - encryption makes it impossible to access bank card details without the corresponding encryption key required for merchants to conduct transactions. The methods used to encrypt bank cards include PIN numbers, magnetic strips and a CVV.
Computer passwords - encryption makes your passwords unreadable to hackers.
Internet shopping - encryption means that your personal data supplied when shopping over the internet is protected from unwanted individuals.
The blockchain is decentralised, meaning it has no central authority like a central bank or government. It displays an unchangeable, immutable record of transactions across a public or private peer-to-peer network, which is accessible to all at all times.
The hype surrounding the meteoric rise in cryptocurrency prices has recently introduced people to the term 'blockchain’. But aside from being the backbone of cryptocurrency, blockchain technology has many use cases that could improve our day-to-day lives.
Blockchain’s Potential Benefit
PWC’s Time for trust: The trillion-dollar reasons to rethink blockchain report (2020) estimates that blockchain technology could increase global gross domestic product (GDP) by $1.76 trillion (1.4% of GDP) by 2030.
Example Use Cases (Existing and Future)
The introduction of blockchain technology in international payments has already proved to lead to greater levels of efficiency due to blockchain’s tamper-proof, automated system requiring fewer intermediaries than under the traditional system. As a result of greater efficiency, costs of remittance are lower.
The chances of human error within accounting and auditing systems drop significantly with the implementation of blockchain technology.
Insurance companies can benefit from blockchain through smart contracts, which could automate reporting and compliance procedures—for example, denying multiple claims on the same incident.
Supply chain businesses can utilise the immutable proponent of blockchain to track goods across the supply chain.
Healthcare businesses could use blockchain technology to improve the privacy of patients' personal information in healthcare systems. In addition, blockchain technology could be used to link data from specialist medical devices to an individual's healthcare record.
Blockchain technology can undoubtedly improve our lives in the years and decades to come. However, it is important to remember that just because cryptocurrency’s underlying technology will be helpful in years to come does not necessarily mean that any given cryptocurrency is ‘the future’.
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