Popular Use Cases of Blockchain Technology You Need to Know
The story was originally published on Hackernoon. I am the Blockchain! I am invincible because I replicate myself on multiple computers. Yea like the Ultron. You cannot corrupt me. Though Bitcoin and Ethereum were my first applications. My true power is yet to be unleashed.
Credits : xkcd
Identity
Let me start with identity cards, badges, and things. However, fancy may design it. It can be replicated. You know about 3D printers right? How do you verify them? Some organisations provide online verification service. You can scan the card or punch in the number and verify if it’s authentic. But, this can be costly, you need to pay for the cloud. With Blockchain you don’t have to build your own identity infrastructure, you can use Ethereum’s open Blockchain to store the identity details. Anyone who wants to verify just has to query the open Blockchain.
Notary
Most of your ownership records are stored in paper ledgers. These can be tampered. The data on Blockchain cannot be altered. On a Blockchain there are two things. A block and a chain. At a very high level, it is just a chain of blocks. Since it’s inside computers, we can rule out the physical stuff. Here digital information is divided into blocks and linked together. For example consider the following blocks, each represent a country. Each of them contains the city names of the respective country.
Wait, there is something more. Each of these blocks has something called a hash. A hash is a set of characters (eg. “1hi515AHA5H” ). Hash is derived from the information contained in the block. The block of U.S.A has cities New York, Los Angeles, and Chicago. So the hash would be something like “NYLAC” (Technically that’s not the case, but you get the idea).
Every successive block will contain the previous block’s hash. This is what binds them together (The force). If someone tampers the first block to add the city Boston. The new hash becomes “NYLACB”. However, the succeeding block of India has already stored the hash as “NYLAC”. This mismatch will break the chain. So the purpose of hash is to make sure no one tampers it. The point I am trying to say is you can’t tamper my records. If you do, I will know.
Digital Assets
I hope you have heard about ICOs(Checkout TravelChain). It’s a new way to raise investment. Anyone anywhere can now become an investor. When someone invests in your company you should give them something back right? Like stocks or shares? ICOs offer a digital asset called token. These tokens will be stored on your Blockchain wallet. You will be able to use these tokens to pay for the company’s services or even exchange them at a later date when its value increases.
Smart Contracts
Credits : xkcd
Mark and Sara
Mark hasn’t paid his rent for five months. When Sara questions he promise to pay later. She is helpless. She can’t afford a lawyer. Courts take eight months to almost a year to enforce action. The only option is to persuade Mark.
Joe’s business
Joe is a businessman. He does business with different corporates on a frequent basis. A few months ago he signed a contract with a retailer. Though the conditions of the contract were met. The retailer refused to pay. These people take advantage of the legal system and persuade Joe to settle for less pay. Joe had such experiences before. In some cases, he went to court. The time and money he spent there cost him his profits.
How do we help Sara and Joe?
Have we solved this problem elsewhere? In Sara’s case, we need to make Mark pay the rent every month. A time-based trigger. Your calendar app uses such trigger to give you notifications of predefined events.
In Joe’s case, once terms of the agreement is met the party needs to pay. It’s a condition based trigger. Consider the last time you purchased an ebook from Amazon. Amazon will only deliver it once the payment is confirmed.
The point is computer programs execute such instructions consistently. It did when you clicked on this article, scrolled down, etc . In order to help Sara, we need to convert the agreements of the contract into code.
Pseudo code of the smart contract between Sara and Mark
If today’s date is 30th and rent is not paid then
Transfer $500 from Mark’s account to Sara’s account
But where do we deploy this code? It should be deployed on computers of all parties involved. Sara’s and Mark’s bank will be part of a private Blockchain network. Joe and Sara will sign a coded contract(a.k.a smart contract). Then it’s deployed on the network. Both Mark’s and Sara’s bank will have a copy. On 30th of every month when the clock ticks 12.00. The agreed amount gets transferred from Mark’s account to Sara’s account. Joe started using smart contracts to enforce his clients to pay the agreed amount.
Sara is happy because she doesn’t have to trust Mark’s consent to transfer rent. Joe’s glad because he doesn’t have to go to a court for justice. Instead, he can spend those efforts to grow his business.
Digital Voting
Remember the last time you stood in a queue to vote? What if you can do it at home? The biggest problem with online voting is its security. Votes can be tampered or hackers can find out who you voted for. Blockchain can make your vote anonymous and provide better security. Since voter turnout in America is low, digital voting can bring in more participants.
Distributed Storage
Presently you use services like Gdrive, Dropbox to store your files. The problem is you have to trust them that they won’t peep into your data. Governments can force them to disclose data if required. On Blockchain data is decentralised its stored on different computers on the network with high encryption. This can reduce costs. If you have excess storage on your computer, you can rent your excess storage capacity. Storj is an example. Yea, Airbnb or an Uber for digital storage.
Thank you for coming all the way here. Follow us, HackerNoon and me (Febin John James) for more stories. I am writing a book about Blockchain. If you wish to get the pre-release version sign up here. I also recommend one book with every story I write. For this story, it’s Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World. Reading is invaluable. (If you don’t have time for reading please checkout Mentorbox).
