By Dariya Lopukhina
In 2017, Bitcoin and other cryptocurrencies went through significant enough price surges that they are now monitored on a daily basis in mainstream media outlets. Naturally, some speculated this is a bubble. Others invested heavily.
Bitcoin, Ethereum, and dozens of other alt-coins continue to be watched closely. Bubble warning stories, announcements from investors, price movements by “whales” and other key players, exert an influence on the value of these crypto-currencies.
As an asset class, it could take years, and some regulation, before they achieve mainstream acceptance as a safe investment vehicle.
However, the technology solution behind crypto-currency – known as the blockchain – also referred to as “smart contract” and ledger technology – could have much wider ramifications. Entrepreneurs and large corporations are finding ways to improve and overhaul existing processes using blockchain, and in this article, we will explore some of the ways it could impact or be applied to your business.
1: Financial sector
Banks are using outdated systems, with modern updates, workarounds and modifications grafted on. For businesses, this puts us at risk from phishing, social engineering and cyberattacks. Our details can be used to send fraudulent payments, or we could unwittingly send a payment to a cybercriminal, with little hope of getting the money back.
These are just a few of the reasons the financial sector is looking to blockchain to transform outdated systems. Eighty of the world’s leading banks – including several central banks – have joined a consortium, known as R3, to create Corda, a distributed ledger platform that meets the highest standards of the banking industry, yet it is applicable to any commercial scenario.
The International Monetary Fund (IMF), has taken notice, sending out a discussion note to staff: “Rapid advances in digital technology are transforming the financial services landscape, creating opportunities and challenges for consumers, service providers and regulators alike.”
Now banks need to find a way to implement or integrate Corda and other solutions within a complex technology stack, to improve the speed and security of financial transactions for everyone – consumers and businesses.
2: Asset management and tracking
Global shipping giant, Maersk, is already working on a trial of the Hyperledger Fabric to track shipping containers around the world and more easily prove that records haven’t been altered. Created by IBM and Digital Asset, it was designed to host a “chaincode” of data, more secure than traditional asset management and tracking systems.
Numerous sectors that own, manage, maintain or insure valuable assets – are finding that blockchain features – such as the security of the records – are worth looking into further, compared to traditional software, especially when records can be modified too easily.
3: Replacing traditional contracts
Contracts are another area where blockchain could prove advantageous. Enforceability is automatic, and requires the confirmation of all participants in the smart contract. Terms must be met, with the relevant proof, before a contract could be enacted. Failure to adhere to terms would mean payment could be withheld.
Smart contracts, compared to traditional contracts, have numerous advantages, and the tech sector – working with law firms – need to look into this more closely. Businesses everywhere would benefit.
4: Improving security
Cyber attacks are not slowing down. Businesses of every size are at risk. Blockchain is considerably more secure than traditional security systems. One advantage is the data stored in a blockchain is decentralized – with multiple computers, or nodes, storing pieces of the information. Unlike traditional servers and data stores, including the cloud, where everything is in the same place. Once a cyber attacker infiltrates a traditional store, everything is at risk.
Not with blockchain. As one analyst wrote: “Unless the hacker could simultaneously bring down an entire network (which is near impossible), undamaged computers, also known as “nodes”, would continue running to verify and keep record of all the data on the network.” Destroying a whole network is a near impossible task, which means confidential data is safer in a distributed network.
5: Data compliance and records
Business data is a valuable asset. Cybercriminals will do anything they can to gain access to your systems. If entrepreneurs in the blockchain space, working on this problem right now, can find a way to apply this in a business environment – with user-friendly applications – then the security of your data could improve enormously.
As a long-term solution to data security, record keeping, and compliance, blockchain has numerous uses that will make it easier for businesses to operate and grow.
Dariya Lopukhina is a marketing strategist and writer at Anadea, a software development company specializing in innovative web and mobile solutions for business automation. Follow her on Twitter @DariyaLopukhina