Naredla Mani Kumar
Ever wondered why the world is going bonkers over blockchain technology? Blockchain takes pride in being one the most popular technologies in 2021 due to the ample amount of business solutions and career opportunities it offers. Let me help you in getting an outright understanding of blockchain and how it is disrupting various industries.
What is blockchain
Blockchain is a unique database where data is stored in blocks which are arranged in a chained sequence and is stored in many computers known as nodes to validate the blocks. The data once stored in the blocks cannot be altered or tampered with. So, Blockchain offers security, immutability and anonymity.
Even though it was invented back in 1991, it only managed to gain people's attention when Satoshi Nakamoto ( Pseudonymous name) created bitcoin, a digital currency on blockchain which aims to facilitate transactions on the internet without an intermediary and to destabilize the centralized financial system and basically any system which has unequal distribution of power.
The industry is still in the early stages of implementation and we can compare it to the internet in 1990's. Even though blockchain is not just related to digital assets, they have contributed enormously to the technology in terms of adaption.
What industries can Blockchain disrupt?
This technology has a lot of use cases in almost every sector and new utilities have been popping up every single day. An estimated $3.1 trillion can be added as business value by implementing blockchain by 2030.
Let's look at few industries where blockchain has the potential to completely disrupt.
Banking industry has not faced any competition until the launch of crypto currencies. Banks have the authority to lock our money, question us for withdrawals and most of the bank's operations still take days if not months to complete. But crypto has challenged the system by bringing a transparent and decentralized finance (DeFi)
DeFi has everything a bank can offer but in a better form. It offers loans, lending, staking (Deposits), collateral free loans (Flash loans).
Here's what a famous tech entrepreneur Rick Falkvinge has said:
"Crypto currencies will do to banks what email did to the postal industry"
Remittance payments industry:
Remittance payments are the money sent back to native country by a person working overseas. Many of the major players in the money transfer sector charge upwards of 3% for completing the transaction.
Crypto currencies have changed it forever. You can send money to literally anywhere in the world at a fraction of the cost of what those companies charge.
Digital art and collectibles:
There is a saying that the love for art never dies in the world. But digital art and rare collectible items has never been mainstreamed even though internet has been widely used.
Blockchain has solved this problem with a relatively new use case called NFTs. These are non-fungible tokens which means they cannot be copied or replicated. Any form of digital art, music, videos, documents and even identity can be minted as an NFT.
As data is stored in large number of computers among different nodes, it is practically impossible as of now to hack all of them at the same time. So, Blockchain provides data security for businesses and can save businesses from data breaches and cyber-attacks.
Drawbacks of Blockchain
- Theoretically, quantum computers pose a threat to blockchain as they can destroy the cryptographic principles behind the blockchain.
- Few blockchain applications pose a threat to the environment as they consume lot of electricity.
- Data stored is immutable which can be an advantage or disadvantage for different instances.
In simple words, we can conclude that it's potential is not yet completely known to mankind and blockchain is going to play a crucial role in the future technology evolution.