Blockchain is a familiar term these days, mostly thanks to Bitcoin. And while many people think that the blockchain technology exists because of Bitcoin and is part of its network, technically it’s the other way around. Blockchain is actually the basis of Bitcoin and cryptocurrencies in general. While that’s the main use for it now, it isn’t everything that this technology can do.
What is a blockchain?
It’s a bit tricky to give a short and sweet explanation of a blockchain. Basically, it’s a decentralized list of records, which are linked together. The information is encrypted and each record, or block, contains the hash of the previous block along with a timestamp and data – hence, the chain. You can’t change one block without disrupting the entire chain behind it.
The blockchain technology is also viewed as a transparent and distributed ledger of data. As such, it can be used for many things, not only as a backbone of cryptocurrencies.
Here are five possible uses for blockchain beyond virtual money:
This is the second most popular idea and use for a blockchain after cryptocurrencies. Smart contracts can operate as applications and run functions. For example, a “clause” can kick into effect after certain conditions are met. It also makes tampering with the terms of that contract quite difficult and will help keep everyone honest. With a similar approach, one can create safe notary and legal documents. However, there’s still a long way before smart contracts become a part of the day-to-day life, because of their complex configuration.
Distributed cloud storage
That’s a slightly braver idea. Expand a cloud storage service not only to one server or a data center. Instead, make it distributed over a huge amount of computers. Add strong encryption and no ideal way to sneak in and steal data without trace, and you may have a winner. It would still be a challenge to find so many machines, even though, with the right incentive, people could be willing to share some of their otherwise unused storage.
Digital ID cards and more
Proving your identity right now depends on a small plastic card, which sounds a bit strange in the dawn of the digital age. A blockchain can help change that, and add an extra layer of security to make ID theft more difficult. Plus, a similar method can be used to add IDs on goods and devices in order to make it easier to verify whether they are genuine or counterfeits.
Health data safety
It’s a topic which is still rarely discussed, but it has a potential to be a very big issue – the theft of health data. We all know how crucial it can be to keep such information safe. On the other side, such data is also vital for many health projects and research. A blockchain can add the much-needed safety layer to keep health data safe, but also make it transparent and accountable for everyone who uses it for research purposes.
Digital online voting
Of course, a blockchain can facilitate the process of voting for pretty much everything online. It could make that process much safer and it would be very difficult to manipulate the results. Plus, it reduces the costs for organizing polls and elections and makes all types of polls much easier for people to safely and confidently share their opinion.
While all of this seems lovely, there’s a catch. A recent report by Cowen and Company predicts that it will take about 5.9 years on average before the blockchain technology enjoys a widespread adoption. For some types of services and uses, that time could be a lot longer.
In short, while the blockchain technology has a lot of promise and potential, there’s still quite a long road ahead before it’s used commonly for something other than cryptocurrencies. Still, IDC predicts that the blockchain solutions market will grow more than double to $2.1 billion this year, so the potential and money are there.