What Is Blockchain?
For those who aren’t familiar with blockchain, it can be defined as a distributed database that stores data. Most data storage is centralized, but with blockchain each piece of information is stored on a “block” or what is known as a node. Each node is created when data is added to the chain (all the nodes are connected to other nodes). This chain of data isn’t controlled by one person, rather it is spread out and duplicated so that every entity that is represented on the blockchain has access to the complete record of it. Each node is encrypted and can’t be edited, so if some part of the information needs to be altered a new node is created.
Of course, the first technology that spawned from this was the cryptocurrency Bitcoin, but today it is being developed for many more applications. Let’s take a look at three:
Blockchain technology is perfect for tracking financial transactions. Everyone that uses a checking account knows that they have a ledger that they need to update once they deposit or withdraw money from that account. Blockchain is set up to do this by nature. Each transaction gets its own node. Furthermore, since it’s a distributed system, it can work for multiple users at once, creating what are called smart contracts. Essentially, when two entities enter an agreement with stipulations, blockchain can trigger payment when the conditions are met, effectively automating the flow of capital.
Improving Supply Chains
The past couple of years have wreaked havoc on supply chains, but blockchain technology is literally the perfect technology to help keep them running effectively. The distributed nature of a blockchain can work over multiple points on the supply chain, making it a great tool for both procurement and distribution. If companies can know the status, condition, and source of each product or component they receive, each member of a blockchain-linked supply chain can enjoy better transparency, improving the whole process.
One of the first thoughts when blockchain was being considered a solution to data problems was how it would work in the healthcare system. Today, companies are creating applications that not only improve patient, care provider, insurance communication and give patients better control over their medical information, they are also creating solutions to better manage outpatient care. Security is a prime consideration when it comes to health records and the naturally secure blockchain technology appears to be a great solution to keep those records secure.
Blockchain is exciting, but also taking quite a bit of time to move into the mainstream. What do you think about blockchain technology? Do you think that it can be the answer to a lot of society’s digital problems down the road? Let us know your thoughts in the comments section below and check back soon for more great technology content.