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Blockchain: what it is, how it works and what are the 15 potential uses

What is the Blockchain ? In recent times it is enough to take a tour on the web to understand that the terms Blockchain e Bitcoin they are highly sought after.

It is no coincidence that blockchain is perhaps the most popular word in the digital field and Fintech, so it is important to understand well what it is, where it is used and why it is considered a revolutionary technology used in different sectors.

South Korean blockchain - Blockchain: what it is, how it works and what are the 15 potential uses

Blockchain: what is it and how does it work?

Translated as "chain of blocks”, The Blockchain is a big one digital register in which the items are grouped in concatenated blocks in chronological order.

We can consider the Blockchain as a decentralized, democratized and transparent system and a shared and immutable book, in which all the information contained in it is accessible to anyone.

In other words, we can define the blockchain as a technology in which the register is structured as a chain of blocks containing transactions and whose validation is entrusted to a consensus mechanism, distributed on all nodes of the network.

Its origin is quite recent (dates back to 2009) when Satoshi Nakamoto baptized the Bitcoin.

Nakamoto's revolutionary idea is about a type of data storage where everyone can see what's inside and make sure it's real. Not even a single bit can be changed.

The main characteristics of blockchain technologies are the immutability of the register, the traceability of transactions, transparency and security based on cryptographic techniques.

From an operational point of view, the blockchain or "block chain" is based on a network and allows you to manage the updating of data with the collaboration of the participants in the network and with the possibility of having shared and distributed data with all participants.

When you hear about Blockchain, often and willingly, it is associated with cryptocurrencies, in particular Bitcoin, but in fact it is not only the solution to create unique digital assets.

Although initially the Blockchain was used for verify all transactions among users and avoiding fraud, with the maturing of times and technologies, the blockchain has found use in different application areas, revealing its usefulness in different sectors and areas of application: from logistics to banks, from healthcare to managed savings, from agriculture to the school sector.

Blockchain: how does it work?

As anticipated, the Blockchain or "block chain" can be defined as one complete history of accounting transactions and blocks as individual statements.

The movements in Bitcoin are entered in the system in a chronological way, exactly as happens for the accounting transactions (debit and credit movements).

Basically, from the operation point of view, a part of a transaction starts the process by creating a block, and everyone can form a data block.

This block is verified and validated by millions of PCs connected to the network (the so-called nodes) and is added to the chain permanently.

The moment a block is completed, another is generated.

All information is encrypted: this allows you to avoid all forms of fraud and counterfeiting by attackers.

All transactions are performed from user to user, there is no need for any intermediary and there is no central decision-making power.

Blockchain: what are the uses and areas of use?

Although it is erroneously thought that the blockchain can only be implemented in the banking and financial sector, we find out which ones are 15 potential uses of blockchain technology.

1. Payment processing and money transfers

The blockchain is the tool that allows you to accelerate the transfer of funds from one side to the other. Most transactions processed on a blockchain can be settled in seconds.

2. Monitor the supply chain

Thanks to the blockchain it is possible to quickly identify the inefficiencies within the business supply chains. In addition, the blockchain allows companies, and perhaps even consumers, to monitor validation and pass quality control along the supply chain and the various steps from supplier to final consumer.

3. Retail Loyalty Reward Programs

Blockchain could further revolutionize the retail experience by becoming the starting point for i loyalty rewards.

By creating a token-based system that rewards consumers and storing these tokens in a blockchain, it would incentivize consumers to visit a particular store or chain to do the shopping.

It would also eliminate the fraud and waste commonly associated with loyalty programs that involve the use of a card.

4. Digital IDs

More than 1 billion people around the world face identity challenges. Microsoft is looking to create digital IDs within its Authenticator app - currently used by millions of people - which would allow users to check their digital identities.

This would allow users residing in poor regions to access financial services or start their own businesses. Of course, Microsoft's attempts to create a decentralized digital ID are still in its infancy.

5. Data sharing

La criptovaluta IOTA launched a beta version of its data marketplace in November, showing that the blockchain could also be used as a marketplace for sharing or selling data.

Since most corporate data is not used, the blockchain could act as an intermediary to store and move this data to improve a number of sectors.

Although still in its infancy, IOTA has over 35 participants offering feedback.

6. Copyright protection

In a world where Internet access grows exponentially, the copyright and property laws of music and other content are often evaded.

Thanks to blockchain technology, these copyright laws would be significantly strengthened for digital content downloads, guaranteeing the right protection for content created and posted by the artist.

The blockchain would also provide data concerning the distribution of royalties to musicians and content creators in real time.

7. Digital voting

Blockchain technology offers the possibility to vote digitally: immutability allows you to make them Voting completely transparent and safe, without problems scams.

8. Transfers of real estate, land and cars

One of the main objectives of the blockchain is to eliminate the card: if you buy or sell land, a house or a car, you need to transfer or receive an act.

Instead of managing it on paper, the blockchain can store contracts on the network, allowing a transparent view of the transfer and of the change of ownership.

9. Food security

Thanks to blockchain technology it is possible tracking down foods from its origin to the dish.

Since the blockchain data is immutable, it is possible to track the transport of food products from the manufacturer to the supermarket.

Furthermore, if there was a food safety problem or a fraud, the blockchain would allow to find the source of the contaminant much faster than it can be done at present.

10. Immutable data backup

The Blockchain allows you to back up your data.

Although cloud storage systems are designed to be a reference source for data security, they are not immune to hackers or infrastructure problems.

Using blockchain as a backup source for cloud data centers - or for any data, could solve this problem.

11. Tax regulations and compliance

Cannabis and marijuana producers can use the blockchain as a means of recording their sales and demonstrating to legislators that they are abiding by local, state and / or federal laws.

Moreover, thanks to the blockchain, companies can transparently demonstrate that they are up to date with the payment of taxes.

12. Workers rights

Another interesting use of the blockchain is to strengthen the rights of workers around the world.

According to the International Labor Organization, 25 million people around the world work in forced labor conditions.

Coca-Cola, together with the U.S. Department of State and other partners, is working on a complete blockchain registry of smart contracts - protocols that verify, facilitate or enforce a contract - to improve labor policies and force employers to honor digital contracts with their workers.

13. Medical records kept

even the health sector is already moving away from the card for archival purposes.

However, the blockchain offers even more security and convenience. In addition to storing patient records, the patient, who has the key to access these digital records, would have control over who has access to these data.

14. Weapon tracking

The Blockchain would allow to keep track of the weapon properties.

15. Stock Trading

The blockchain could compete or even replace the current ones stock trading platforms to buy or sell shares.

Since blockchain networks validate and settle transactions so quickly, they could eliminate the waiting time that investors encounter when selling shares or accessing funds to withdraw or reinvest them.

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Jacqueline Facconti

Graduated in Business Economics and Strategy, Management & Control with 110 cum laude from the University of Pisa, editor and editorial collaborator for various blogs and Economic and Business sites

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