Blockchain in Real-World Industries
To help you understand some of the other advantages that blockchain offers to businesses, here are some examples of industries that are currently using blockchain technology. This will surely get blockchain explained!
Identity
Cybersecurity threats are a huge problem in the identity management industry. In the current world, our identity is controlled by large companies. Whether that be Netflix, Facebook, Instagram, or even the companies we work for.
People are always under the threat of having their identities stolen by cyber-thieves — also known as hackers. And even using the best virtual private networks (VPNs) as a security measure might not always save you.
All of these companies use centralized servers. For example, Netflix is the central point of the Netflix server — if Netflix is hacked, all the data they hold for their customers is at risk.
It was only recently that Equifax’s data was hacked.
INTERESTING FACT
Equifax is one of the largest credit reporting agencies that hold personal information of over 800 million customers. This caused the data of over 145 million users to be stolen.
Blockchain explained: centralized systems vs blockchain.
So, how can personal data hacking be stopped using the blockchain?
Well, your data is currently held in a centralized database (just like at Equifax). A centralized database is much easier to hack into because it uses one main server. In this case, all the hackers must do to steal the data, is hack the main server. In a blockchain, there is no main server — there is no central point for a hacker to attack! Here's a great advantage of blockchain explained.
Banking and Payments
“Blockchain will do to banking what the internet did to the media”, a rather bold statement, right?
This is how important blockchain technology is for the financial industry. By using the blockchain, financial services can now be provided to those that currently do not have them. That’s over 2 billion people!
Let’s use Bitcoin again as an example — thanks to the Bitcoin blockchain, anyone in the world who has access to the internet can now send digital payments. It’s the future! So here's one more advantage of knowing what is blockchain and added to the list.
As well as helping those that do not have financial services, blockchain is also helping the banks themselves. Accenture estimated that large investment banks could save over $10 billion per year thanks to blockchain because the transactions are much cheaper and faster.
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Energy Supply
In the past, people had only one option to receive energy — through a centralized source.
However, we are now able to gather renewable energy from our own devices, or from new grid systems called “microgrids”. Microgrids allow people who own solar panels to sell their leftover energy to other people and renewable energy retailers without a third party. So, let's get another advantage of blockchain explained.
Note: Renewable energy is energy that is collected naturally. Think sun, wind, water, etc.
Blockchain explained: a person taking money from a bank.
Before blockchain technology, people could only sell their leftover energy to retailers (the third party). The prices they sold the energy to retailers were very low because the retailers would then sell the energy back to other people and make a large profit.
As blockchain technology removes the third party, people can agree on a price that is fair for them both — cutting out the cost that was previously taken by the retailers.
Blockchain will change the way that many more industries currently operate
The examples above are only a small part of what is possible using the blockchain. Blockchain is being applied to many more industries than the ones listed above.
Here are some of the other industries that are currently using blockchain to improve the way they operate:
Cybersecurity
Education (like BitDegree!)
Marketing %story% advertising
Supply-chain management
Government systems
Music %story% video sharing
E-commerce
Voting
Blockchain explained: a chart.
With so many advantages to using blockchain, the possibilities are endless! Blockchain gives us all something to look forward to.
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Conclusion
Let’s think about what we’ve learned in this blockchain explained guide and highlight some of the most important features of the blockchain to remember:
What is blockchain?
A peer-to-peer network that removes the need for trusted third parties;
Transactions are processed quicker and cheaper than standard (non-blockchain) systems;
It is a public database and all transactions are visible on the network, preventing cyber-attacks;
The database cannot be changed without more than half of the network agreeing, making it much more secure;
It is not controlled by one single company and it has no single point of failure;
Blockchain can be used in many different industries — not just digital currencies.
How does blockchain work?
It works as a large database that is shared across a network of nodes (computers);
The nodes on the network work together to verify transactions and are rewarded with the blockchain’s currency — a process known as mining;
Once a transaction is verified by the network, the transaction is placed in a block;
New transaction blocks are placed — in order — below the previous block of transactions
All transactions are stored in a distributed database (ledger);
It is extremely difficult for a hacker to change the transactions because they need control of more than half of the computers on the network.
Blockchain explained: benefits for large industries.
How will this benefit large industries?
It removes the cost of third parties;
Payments and data are processed much quicker;
Database management between businesses is much easier;
Data protection/security is improved on a large scale.
Final words to getting blockchain explained
Blockchain technology will change and improve the way businesses operate, but that’s not all it will change. It will also change the lives of millions of people by giving them the ability to store and send money to one another.
Examples of this include over-built hydroelectric dams in certain regions of China, or stranded oil and gas wells in North America. Bitcoin mining equipment is mobile, and thus can be put near wherever the cheapest source of energy is, to arbitrage it and give a purpose to that stranded energy production.First, unlike Bitcoin and Ethereum, Litecoin uses a software algorthym (Scrypt) to mine units. This somewhat prevents individuals from making powerful custom computers (or rigs) specifically to mine the currency.The Royal Bank of Scotland has announced that it has built a Clearing and Settlement Mechanism (CSM) based on the Ethereum distributed ledger and smart contract platform.In 2013, the U.S. Treasury extended its anti-money laundering regulations to processors of bitcoin transactions.
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