Application of Blockchain Technology
Introduction to Blockchain Technology
Blockchain is a set of blocks that records information of transactions like who made the transaction to whom, the amount of trade, in form of a digital ledger that is distributed across hundreds of networks referred to as Node. The blockchain is a connected chain of blocks. Let's say we have different blocks that are connected in a network, this network holds transaction of a particular exchange. Now, this transaction contain information of who owns this particular cryptocurrency. The kind of transaction it is or the identity of the person who owns it, who you sent it to, where it is coming from, and all these kind of information are stored in the blocks, the blocks are called public ledgers.
The ledgers are like a spread sheet everyone can see, so when something happens on the blockchain you can actually go access the blockchain and see who sent money to another, it is different from our physical banks where the transactions are hidden or you need a permission from someone, and that is also where the word decentralized comes from, it is not connected to any body or authority. The only thing you cannot do on the user interface is to make unnecessary changes to it, you can't just make changes to it without being validated.
The distribution makes it almost impossible to hack or cheat the system. When a new transaction is made, it must be verified and validated across every nodes before it is added to the main blockchain. There is something called the main blockchain and the mempool , the mempool holds transaction that needs to be validated. So, there are thousands of thousands of transaction that are pending and needs to be validated, but the blockchain technology is actually very limited to a specific amount of transaction per minute, so it chooses the transaction that needs to be validated in the mempool and once this transaction is being validated across all the nodes in the network, it will be placed in the main blockchain. The main blockchain is a permanent record that can never be changed, it can only be written to and be read, it can never be altered in a fraudulent way because a lot of people have access to it and a lot of people are watching it closely and also validating it.
Also, the data being passed around is secured with high level cryptographic hashing algorithms. The bitcoin actually uses a complex level of hashing, which requires you to do a certain amount of work for you to validate a transaction and place it in the main blockchain. When you do the validation work, that is when you get rewarded with bitcoin, which is like the currency that is spent on this particular network. There are a lot of network apart from this particular bitcoin, each of them have their own way of validation. For bitcoin, the method is called proof of work, you have to proof that you have done this particular amount of work and then you get rewarded with a certain bitcoin amount. Apart from the proof of work, we also have proof of stake and the likes.
The Application of Blockchain Technology
Although the most common application of blockchain technology is in cryptocurrency, there are other sectors that also uses blockchain technology. They can also be applicable in the following sectors;
Healthcare
In the healthcare sector, we have fields like medical information storage where blockchain technology is used to store patients information. It can be a private information whereby the patient actually have access to secure or to block his or her information, and it could also be a publicly available information whereby the record is open for public usage. It can also be used for drug authenticity check, when a drug is being manufactured, it can be given a sort of product code that holds information about the drug, such as the expiry date, manufacturer name and all. This product code could be stored on the blockchain where it is readily available to the public. The user could also buy the drug and just check out the authenticity of the drug on the chain. Another application is in health insurance. Insurance definitely involves money, and it is only natural that with the power of security that blockchain technology has, it can be employed in health insurance.
Government
One of the most popular application in the government sector is in the voting system. A lot of voting systems have actually been developed, but mostly for security purpose and to prevent fraud, voting system can be built on the blockchain where it is sure that nothing can be changed. This way, it will prevent fraud and also allow the public to have access to all the information, thereby making it a free and fair election. Another application is in the tax processing whereby the tax payers information and all transactions are stored on the blockchain and also the moving around of the tax is monitored by the public. This way we can put a check on the government in the allocating of tax fund.
Finance
Another application of blockchain is in the finance industry. It can be applied in loan management. Blockchain technology is actually useful in this system because when you take a loan and you put down a collateral, the collateral can be controlled by the smart contract that is written on the blockchain. In a situation whereby you don't pay off your loans at the expected time, it monitors what will happen based on the terms and condition. Another application is in the trading system, this is what a lot of people are doing right now with cryptocurrency, they trade, exchange and do a lot of swapping. All these are based on blockchain technology.
The Art Industry
The art industry is also seeing a kind of rush due to the introduction of NFT, the Non fungible Tokens which are basically digital arts on the blockchain system.
You can also let me know in the comment section on more application of blockchain technology.