You’ve probably heard of blockchain, but do you know what it’s used for? Aside from underpinning a new class of digital assets called cryptocurrencies (Bitcoin, for example), blockchain has many significant implications for how we live, work and play.
What Is Blockchain?
Put simply, blockchain is a new way of storing information. You can think of it as a shared virtual ledger owned by users (called nodes) on the blockchain network. Any change to that ledger — if someone transfers money or updates a legal contract, for example — is cryptographically verified and then reflected across the entire network, visible to everyone.
Blockchain is the ultimate enemy of bureaucracy. With the use of smart contracts, pieces of code that automate manual processes, blockchain can remove middlemen from a lot of traditionally complex tasks, like buying a house or sending money abroad. The result is a cheaper, faster and more transparent technological framework for the most important industries in society.
Why Should You Care?
As CEO of Altcoin.io, we’re investigating how to bring about these changes faster. We’re working on improving the speed, scalability and interoperability of different blockchains, while also helping others build their own applications. Blockchain’s potential is yet to be fully understood, but should it continue its path to adoption, we could see some radical changes. Let’s explore five of them.
1. Sending Money Abroad Will Be Quicker
Sending money abroad can take days. At best, this is frustrating; at worst, it could mean friends or family lacking basic necessities or waiting for emergency medical treatment.
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Currently, banks hold foreign currencies in nostro/vostro accounts in other countries and use the SWIFT messaging system to arrange transfers. If an agreement exists between the two banks, the transfer is usually done the same business day. But in developing countries, where currencies are strictly controlled, your bank must use intermediaries or liquidity agents, which is more expensive, time-consuming and labor-intensive.
Blockchain solutions like Ripple’s xCurrent dramatically reduce the time and cost of sending money abroad. With participating banks connected through a blockchain network, all the compliance and ID checks are fulfilled automatically and authenticated by cryptographic signatures. Once cleared, transactions are usually settled in just a few seconds, leaving an immutable, transparent record for both banks.
2. Buying A house Will Be Easier And Faster
The property market is a messy, tedious business. Buying a house can take months of grueling paperwork and costly lawyer fees. In the UK, things are even worse. Your seller can accept your offer but reject it later for a higher bid, a tactic known as gazumping (though, officials are finally starting to regulate it).
Most property market issues stem from a lack of trust. Complex land registries backed by reams of signed paperwork make tracking difficult, and verification requires the coordination of banks, government agencies and lawyers. The end result is an expensive, time-consuming process that many of us dread.
Blockchain, however, is trustless, removing the need for complex verification processes carried out by intermediaries. With blockchain, there is a single, transparent version of the truth, and one party can’t make changes without agreement from everyone else. It’s effectively tamper-proof, which cuts down on paperwork and reduces the risk of fraud.
ClickToPurchase, for example, has replaced the laborious title exchange process in the UK with blockchain smart contracts. Once your offer is accepted, titles exchange immediately, preventing anyone from gazumping you. In the U.S., Propy is also using blockchain for title exchange in an attempt to automate the real estate industry.
3. It’ll Be Easier To Treat Health Problems
Your medical history helps doctors treat you quickly and effectively, but chances are it’s fragmented across multiple health care providers. Incompatibilities between providers’ systems make transferring records slow, often requiring manual intervention. Without your full medical history, doctors could waste money and time on tests you don’t need or be unable to give you the best treatment.
Blockchain could make it easier to treat health problems by radically improving the accuracy and availability of your medical history. By creating an accessible, permanent blockchain record, owned by you, you could instantly reveal the ailments, allergies, and lifestyle factors that help doctors diagnose and treat you. It’ll also verify your identity, ensuring you’re not confused with the other John Smith in the waiting room.
4. You’ll Be Able To Verify That What You Buy Is Genuine
Whether you’re buying a conflict-free diamond ring, a ticket to see your favorite band or prescription drugs for a health problem, proof of authenticity is vital. Supply chains that manage every step a product goes through before arriving in your hands are incredibly complex, with many intermediaries confusing the journey.
Currently, the bulk of supply chain management is done through EDI, a messaging system first introduced in the 1970s. Although a big step up from paper, it’s far from perfect. EDI is two-way only, leaving other interested parties out of the loop. If two parties commit to defrauding a third, their activities would remain hidden (e.g., fake goods manufacturers conspiring with distributors to sell products on Amazon).
That’s not the case with blockchain. Every stage of a product’s journey, from its manufacture to the serial of its shipping container, is recorded and available to all stakeholders, with no possibility of cutting corners or falsifying information. It also provides an open and transparent framework that eliminates confusion and disputes.
In short, blockchain ensures that when you buy something, it’s the real deal.
5. You’ll Be Able To Earn More Money From Things You Don’t Use
Big players in the sharing economy like Airbnb and Uber make money doing very little. They generate income from connecting people — not by renting property or driving a fleet of taxis — yet still charge a huge sum for their services.
Since blockchain is decentralized, there are no intermediaries and no need for sharing platforms. You can rent out your home, car or any other connected smart object with no tech giants setting the rules and nibbling away at your profits.