Inventions like the radio, the printing press, and the Internet created new opportunities for individuals to share knowledge and communicate with one another. Although many of these inventions are known to have changed human life for the better, many believe that blockchain is at the top of the list when it comes to the greatest innovations in the world.
The technology is taking things to a whole new level, providing a way to secure and distribute data without someone interfering with it or altering it. While it is primarily associated with cryptocurrencies like Bitcoin and Ethereum, blockchain is used in many other industries, including supply chains, healthcare, and so on.
The initial purpose of blockchain technology
Blockchain technology was primarily created to enable a decentralized way of exchanging value. It eliminates banks, payment gateways, payment processors, and other entities within the financial system, making financial instruments accessible to underbanked and unbanked individuals.
Suppose financial systems collapse; cryptocurrency can become a significant funding source, just as it did when Russia invaded Ukraine in 2021-2022. During that time, the Ukrainian government recognized digital currencies as a legal payment method.
Blockchain plays a key role in fighting corruption in the financial system
While it is true that money makes the world go round, it’s hard to overlook the issues surrounding it. Individuals want to have as much cash as possible – and this isn’t a problem unless unethical or illegal means are used to expand your wealth. Unfortunately, this happens often, and the financial sector is filled with all sorts of temptations. That’s where blockchain comes in as a solution for corruption, solving the existing problems in the industry by mitigating the risk of double-spending or duplicating assets.
The nodes on the digital ledger execute, record, encrypt, verify and store transactions, reaching a consensus to approve a new block. Blockchain is transparent and tamper-proof, making it the ideal solution for carrying out transactions effectively and safely.
Other essential uses of blockchain
Although blockchain is the fuel behind digital currencies, other industries are also recognizing the potential of the technology and taking advantage of it.
Blockchain in banking
Blockchain is changing the banking sector, enabling lending between consumers. At the same time, crypto lending companies included the technology in their loan approval process at a low cost, as there’s no need for lengthy procedures, paperwork, lawyers or banks.
Blockchain in the supply chain
Blockchain can also improve the supply chain by tracking goods movement, thus monitoring variables like temperature and moisture. Efficiency is a significant issue in supply chain management, whether related to sourcing materials, production methods, payments, transportation times, or other activities. However, the entire process can be monitored with blockchain, helping reduce these inefficiencies.
Blockchain in healthcare
Blockchain makes a significant difference in the healthcare sector. Although the technology doesn’t directly impact human health, it plays a role in enhancing the systems utilized to share medical information and knowledge. Otherwise put, blockchain allows healthcare providers to improve their treatment plans, which ultimately improves patients’ lives.
Blockchain in government processes
Government processes face many issues, including corruption, waste, inefficiency, fraud, lack of security and trust, and siloing. Blockchain can dramatically reduce these problems, enabling more accountability from entities regarding spending. This is because the technology can be used to track government funds.
Blockchain’s drawbacks
Undoubtedly, blockchain is incredible and will likely stay in the digital world for many years to come. However, like any other technology, it has some disadvantages worth mentioning. First of all, blockchain is very complex, so it can be quite difficult to understand it, especially if you’ve just entered the crypto space. Moreover, implementing blockchain can be costly, as it involves hiring blockchain developers. However, many companies, especially smaller ones, lack the funds required for this type of investment and, consequently, can’t adopt the technology.
Scalability is another problem of blockchain technology. If you are familiar with the Bitcoin network, you likely know that the speed of transaction completion depends on the network’s congestion. The network increasingly slows down if more and more users join it, which happens because of blockchain’s scalability issues. Fortunately, solutions are on the horizon, increasing the network capacity and enabling faster transactions at reduced costs.
Does the future of blockchain look bright?
It does! Despite the drawbacks mentioned above, the technology has great potential to revolutionize how individuals interact with the digital space. Tech developments have never been perfect; however, they are constantly upgraded to benefit society in the best ways. Humanity depends on innovation, and no matter how much the blockchain and crypto industry continues to stumble, it will likely reinvent itself and flourish after each challenge.
Blockchain promises many great things, including transparency, immutability, trustless transaction verification, and instant P2P settlement. In the past few years, the technology has been highly adopted by organizations, developers and financial institutions. As blockchain continues to improve, more individuals and businesses will likely embrace it. Blockchain can also change how society operates, laying the foundation for Web3 - the third iteration of the World Wide Web. The decentralized nature of the blockchain can help build a more transparent and secure Internet, enabling users to interact with smart contracts and dApps without relying on an intermediary or central authority. Unlike its Web2 predecessor, Web3 is built to be a more democratic version of the Internet, giving individuals control over their data and Internet architecture.
Blockchain technology brings together individuals from different walks of life, like business people, gamers, artists, and politicians, who all believe that it could significantly impact society in the future, completely reshaping it. Of course, only time will tell how far the potential of blockchain can go, so enthusiasts can only wait to see what happens as they take advantage of what the technology already has to offer.
If the challenges surrounding blockchain are addressed, more people will likely be able to see what an extraordinary invention it is. With AI developments and scaling solutions constantly being implemented, blockchain will likely improve, and more use cases will emerge in the following years, ultimately resulting in more companies adopting it. It will be exciting to see how this technology will improve society.
