How a Blockchain Is Expected to Change Various Record Keepings
Blockchain to Expand Beyond Cryptocurrencies
The two Bs, that is, bitcoin and blockchain, have been gaining attention worldwide. Though bitcoin was developed on blockchain, a blockchain is not a platform merely for cryptocurrencies only. A blockchain is a digital ledger of transactions those are publicly and permanently available to the users, without the need of an expensive third-party intervention. The transactions are secure, anonymous, and irreversible. This very nature of the blockchain makes it usable for many other purposes or commonly called use cases. Ethereum went ahead another level by creating a blockchain platform for decentralized applications (dApps).
Since the invention of Ethereum in 2015 by Vitalik Buterin, many international companies such as Deloitte, IBM, JPMorgan, and Microsoft have started experimenting with blockchain. They have identified using a blockchain in various sectors such as energy, retail, supply chain management, voting, health care, governance.
A blockchain has inherent security coupled with anonymity that is dependable. With an understanding of how a blockchain works, it can be extended to a number of use cases, something that is still in very stage of infancy. Over time, as blockchain is maturing, it may emerge as a threat for large governmental bodies due to their redundancy. Power comes back to an individual without the third-party intervention. Imagine voting without the large governmental department!
Scaling is another evolving innovation in the blockchain arena. Currently, a number of computers are involved in a network, making it slower. With a scaled blockchain, the speed of transaction processing increases without compromising the security.
With these developments in the blockchain technology, it is expected to bring phenomenal changes in how business will take place in future. A couple of decades ago, when the businesses were not on the Internet, there was a different model and accessibility. With the arrival of the Internet, the businesses went online and penetrated the international market through cyber means. Now, blockchain is on the verge of bringing another revolution of how business models will change. The direct results are reduced expenses and increased security.
Any Recordkeeping in a Secure Way
International Records Management Standard (ISO 15489-1:2016) defines a record as follows:
information created, received and maintained as evidence and as an asset by an organization or person, in pursuance of legal obligations or in the transaction of business.
A recordkeeping system has a set of rules to manage the records. Although a blockchain is simply called a digital ledger, this is actually a distributed database. Secure, trustworthy, and permanent records and increased processing times with reduced costs are some of the basic requirements of any recordkeeping that a blockchain takes care of very well. Consider a record of house titles, registries, births, deaths, wills, legal agreements, and so on, maintained by various organizations. All these forms of records can get on the blockchain offering much more inherent benefits. There is a low possibility of having unreliable or incorrect records placed by rogue miners.
Various Other Usages in the Near Future. Uses in Financial Services, Insurance, Education, Health Care, and So On
Various other usages of a blockchain in the near future are identified as follows.
The banking, finances services, and insurance (BFSI) sector can make good use of the blockchain technology toward the next generation of their business and technological infrastructure. A blockchain enables them to capture the international market with reduced expenses and increased processing times. With global trade, the volume of international payments has been increasing every year. With blockchain, the BFSI sector would be able to reduce settlement times, and leverage further from the digital profile stored on the distributed ledger. Due to publicly available data, there is an automatic compliance with which a regulator can have on-demand access to the full historical data of a transaction.
Traders, that is, importers and exporters, use trusted financial organizations to materialize their monetary transactions. This service comes at a significant cost to the traders. In a trading activity, there are many stakeholders, such as import or export bank, customs, freight, inspection agency, regulating agency, apart from an importer and exporter. All these entities interact at some point in the trade process. This process has the characteristics of manual contracts, invoicing, inspection, miscommunication due to multiple countries involved, possible fraud, and eventually, delayed payment. With the blockchain, the trade process will have a different outlook that involves smart contract, real-time review, eliminated of intermediary banks, reduced risks, and transparency in records.
Generally, audit and compliance costs are very high. A non-compliance may result into legal consequences to an individual or organization. This is considered a very time-consuming and resource-intensive exercise. This further gets complex due to software applications not sharing information with each other at a department level. A blockchain offers real-time auditing, which also eliminates the manual errors those could creep in. Smart contracts further reduce the efforts and enable forwarding information to relevant departments. This has the potential to make the task less resource-consuming and more time and cost savings.
Voting is a potential use case of a blockchain. It may be at a political level to elect a candidate, or within an organization to gain consensus on some issue. It is generally noted that not many eligible voters vote! Organizations try to come up with various initiatives to increase the voter participation. Also, current voting processes are costly and lesser transparent. Worse is to have misleading conclusions based on voting. This resource-intensive process, if manual, becomes vulnerable to errors. With blockchain, one can expect a streamlined process for voting with more penetration to and participation by voters, smart contracts to do automatic validation, and increased transparency. Based on voting, the conclusions can be more aligned toward the betterment of the organization.
Energy is another sector where a blockchain can be used effectively, by developing a decentralized energy supply system. A smart contract to store the excessive energy produced and then matching with other parties where energy production is insufficient. A decentralized storage of transaction data with smart contracts to control the systems and ledger can directly impact how the energy sector is working today.
A blockchain can be used to streamline supply chain management. Features like real-time tracking across the globe with increased transparency has taken major retailer Walmart to partner with IBM to work on the Hyperledger blockchain. Pharmaceutical industries can make use of a blockchain to comply with regulations regarding their products.
Currently, business intelligence and analytics is an expensive and resource-intensive process used to come up with predictions or forecasts or derive conclusions based on the available data. With the predictive power in the hands of consumers directly, an organization can direct input with more accurate forecasts.
As discussed earlier, Ethereum offers a blockchain platform to build dApps. Traditional applications have their data in a centralized location or database with restricted access that is prone to failure. dApps are opposite of such traditional applications, because of which there is total elimination of single points of failure.
The Internet-of-Things (IoT) is the network of physical devices, including vehicles, home appliances, and other items in the digital form that enables these things to connect and exchange data. This is direct integration of physical world and computer applications to provide best of both the worlds in terms of efficiency improvements and reduction in errors caused by humans.
Identity management is a major use case of a blockchain. Identity records, birth certificates, passports, drivers’ licenses, and marriage certificates are some of the documents for everyone. A blockchain offers the capability to encrypt the user’s identity and retrieve when needed. Identity theft and fraud are major concerns in the current era. A blockchain has inherent validation and irreversibility that makes it very suitable for this purpose.