Blockchain: A Brand New, Revolutionary Technology
By Armaan Agrawal
Blockchain is a term that many of us hear in our daily lives, whether that be on the internet, in the news, or in daily conversation. However, very few actually know what it means and how it applies to society today. At its core, blockchain is a distributed database or ledger that is shared by a computer network. A blockchain is able to store information in a digital format in such a way that it is easy for people to exchange data in an efficient and secure way, with blockchain preventing anyone from tampering with or illicitly accessing the data. The way it works is that data is collected in groups called “blocks,” linked together in a “chain” using cryptography. Each transaction is independently verified, time-stamped, and added to the ledger. This technology is very versatile and has been utilized in various industries across the world.
One of the most significant applications of blockchain is in banking and finance. Blockchain is used in this sector in various different ways. For example, smart contracts are contracts that are fulfilled instantly after all stipulations are met via the blockchain. They do not require a middleman and add a greater level of security in regards to the contract. Another example is payment processing. Blockchain allows financial payments to be processed both securely and efficiently. Using a peer-to-peer system, money can be sent easily, with the nodes in the blockchain then working to instantaneously either accept or deny the payment, avoiding long, unsecure money transfers. In the context of banking, integrating blockchain in this way allows consumers to see their transactions process in an extremely short amount of time, as opposed to deposits and withdrawals taking days on end in order to be verified without blockchain. Blockchain allows banks to securely and efficiently exchange funds between institutions. Additionally, the stock market includes many different moving parts, with investments taking a great deal of time to process and get cleared. Using blockchain, these processes become much faster and eliminate unnecessary steps through peer-peer systems and smart contracts. The most well-known blockchain-based systems in the financial sector are cryptocurrencies, such as Bitcoin and Ethereum, which have disrupted the way financial transactions occur in day-to-day life. As opposed to other currencies controlled by a single central authority, such as the U.S. Dollar, blockchain spreads the operations of cryptocurrencies across a network of computers, meaning that Bitcoin and other coins do not require the support of a central authority.
Another application of blockchain technology is supply chain management. Supply chain management refers to the technology and methods that enables companies and corporations to track goods and products from where they come from to where they are consumed. Blockchain-based supply chains have the capability to automatically update transaction records when changes are made, allowing transactions to become more easily traceable. It can also allow users to more easily gain information about said transactions, including the price, date, origin, quality, certification, and destination. This increased level of traceability and the simplicity of information-gathering has clear benefits. For example, if a company finds a faulty product, they can trace the product’s supplier, shipments associated with it, and easily recall it. For perishable products, companies can easily obtain information of the quality of the conditions in which those products are being held, such as temperature.
There are many other applications of blockchain. In healthcare, blockchain can be utilized to record patient’s health records and medications. When it comes to property and land ownership, blockchain can store property deeds and other important documents to make the process of tracking property ownership much easier. Elections and voting also benefit greatly from blockchain technology, with voting being made much more efficient and secure when paired with blockchain, reducing the risk of election fraud and making the voting process much more transparent.
These are just a few examples of how blockchain can be used in our society. However, it is important to weigh the pros and cons of blockchain technology. Some of the positives include the reduction of human error and costs when it comes to verification, higher levels of security coming with decentralization, and more transparent technology. The disadvantages are the high frequency of use in illegal activities, significant financial and environmental cost in relation to cryptocurrency, and lack of regulation. Therefore, while blockchain is a powerful piece of technology with the ability to better and further our society, we must make sure that we use it in responsible and appropriate ways.
Works Cited
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Daley, Sam. “Blockchain in Finance: What It Is and How It’s Used.” Builtin, https://builtin.com/blockchain/blockchain-banking-finance-fintech. Accessed 13 Mar. 2023.
Gaur, Vishal, and Abhinav Gaiha. “Building a Transparent Supply Chain.” Harvard Business Review, 1 May 2020. hbr.org, https://hbr.org/2020/05/building-a-transparent-supply-chain. Accessed 12 Mar. 2023.
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Singh, Onkar. “How Blockchain Technology Is Used in Supply Chain Management?” Cointelegraph, 26 Nov. 2022, https://cointelegraph.com/explained/how-blockchain-technology-is-used-in-supply-chain-management. Accessed 12 Mar. 2023.
