Blockchain technology is a revolutionizing solution to software systems that are widely used in various industries, like healthcare, finance and cryptocurrencies. Blockchain was initially introduced in 1991 as a way to use cryptography to avoid tampering with digital documents. Later on, blockchain was improved by Satoshi Nakamoto, the creator of Bitcoin, the first cryptocurrency, so that peer-to-peer transactions would occur without the inclusion of third parties.
Now, blockchain features are leveraged in healthcare to protect customer data and track and trace the course of prescription medications. Blockchain is also a reputable solution for managing supply chains as it organizes and utilizes tracking data more efficiently than any other solution.
These are only a few examples of what blockchain can do. Much more businesses could benefit from a distributed ledger, so we’ll get into the multiple usage cases of blockchain technology.
Building apps with blockchain
A few details about blockchain make it the perfect base for building an app. For example, it provides decentralization, which minimizes the possibility of data security issues. Also, with hash encryption, blockchain has a unique signature model that secures data efficiently.
With blockchain, developers can create dApps (decentralized apps) that offer more development flexibility, considering they’re mostly built on the Ethereum blockchain, which has multiple tools and a united community of creators. dApps are used in an array of practical domains, from financial services, identity verification and real estate to healthcare, education and social media.
dApps have the benefit of being free from the control of a central authority, so users don’t need to submit personal information to use the platform. These apps are also censorship-resistant, which is a valuable asset for sectors like social media. However, apps on the blockchain are limited regarding user-friendly interfaces and code modifications. Still, they’re in an early stage of development, these issues will get solved in time.
Blockchain open-source platforms
When it comes to open-source solutions, blockchain platforms provide the best products and services. Because they overcome traditional platforms’ energy consumption challenges and speed, blockchain-based systems create new business models for banking, finance and supply chain sectors.
Open-source blockchains can determine efficiency by considering a few factors. First, its consensus mechanism, be it PoW, PoS or Byzantine, can show us how innovative or not a blockchain is; for example, PoW is known as less efficient, while many blockchains shift to PoS. Secondly, the smart contract function can be more or less easy to develop depending on each blockchain programming language. Ethereum uses Solidity, which is more complex, while Cosmos uses C#.
Stellar is one of the famous open-source blockchain technology that mitigates the design of a new financial system. The platform leverages APIs and SDKs to design efficient economic systems and micropayment services while offering digital and ledger statistics. There’s also Ripple, which focuses on enterprise-level technology to ensure speed, transparency and cost-effectiveness for companies.
Blockchain and the Internet of Things
IoT is the enabler of data sent across the internet, and it works just well with blockchains since they create a tamper-resistant record of transactions. IoT and blockchain enhance trust, security and flexibility to share data among partners worldwide.
IoT blockchain applications are diverse. For example, in freight transportation, elements like temperature, position and the status of shipping containers can be recorded on blockchain. This ensures trust for all parties involved and allows for quick and efficient action. IoT and blockchain help track components in aircraft or automobile industries to ensure safety and regulatory compliance for all business partners.
Actually, blockchain can be used to solve some of the challenges IoT faces. Problems like security, scalability, transparency, and IoT gateway costs can be easily solved with blockchain tamper-proof systems, encryption and coordination. But for blockchain and IoT to work together, developers must address scalability because handling massive amounts of data should be optimized through a clear data model. At the same time, analyzing network privacy and transaction confidentiality is crucial. Finally, IoT sensors need to prove reliable to execute transactions on the blockchain.
Blockchain and the creation of cryptocurrencies
Although blockchain was already created before the first cryptocurrency appeared on the market, it got developed once Bitcoin was deployed. Considering how the crypto demand increased in global revenue at this point, blockchain is essential for the creation of better digital coins, which are necessary for the financial sector to be changed for the better.
Blockchain ecosystems work wonders for cryptocurrencies, as they leverage the perfect medium for them. As someone requests a transaction, nodes validate them through algorithms. With more transactions getting verified, blocks are created, which ends in a complete transaction. This process was one of the most challenging steps for developers to scale through time, as the number of crypto transactions increased tremendously through the years. Statista shows that only Bitcoin accounts for 250,000 daily transactions as of 2021, while Ethereum has more than 1 million crypto transactions.
Blockchain’s features are optimizing the course of cryptocurrency adoption. For example, its decentralization requirement is an efficient way for nodes not to be able to alter the information as they process it. That’s because data spread among several nodes in different locations, maintaining data reliability.
At the same time, blockchain transparency provides an ecosystem where everyone inside the platform can see the transactions happening in real-time. This occurs because all nodes have a personal copy of the chain, so cryptocurrency tracking is easy. The security of the blockchain is also given by its impenetrability. However, since blockchain platforms are new technologies, they can be prone to cyber-attacks. Unfortunately, if someone gets control of more than half of a blockchain’s computational power, an altered version of the blockchain can be introduced into the system, leading to risks for every blockchain participant.
Blockchain technology is the newest way for companies t leverage data security and supply chain management. Blockchain-based tools are safe, transparent and immutable, making them the best option for optimizing businesses and providing products and services for innovative companies.