Blockchain can be described as a distributed database which holds records of digital events or data in a method which makes them tamper-resistant. While a lot of users may inspect access or even add to the data, they won’t be able to change or delete it. The original details always stays put, thereby leaving a public and permanent information trail, or chain, of transactions.
Now you can simply take a good look at it this way: If the whole blockchain were the history of banking transactions, a person bank statement will only be a single “block” in the chain. It is not like so many banking systems, but, there is no single organization which controls these transactions. It is only updated through the consensus of so many participants in the system.
In a very short definition, blockchain can be said to be a record-keeping mechanism which makes it safer and simple for businesses to work together on the internet. Bitcoin can simply be used to track, record and then verify trades of virtually anything which holds value.
Bitcoin is the most famous application of blockchain technology, and it is a currency system which has already taken tech-savvy merchants by storm. The most exciting thing is that the blockchain protocol can easily be used for non-currency purposes as well.
Although it was first intended for just financial transactions, different types of businesses are getting creative using the blockchain ledger, because it can be used to track, record and verify trades of almost anything that holds value. Beginning from ride-sharing to cloud storage to voting, companies in all industries has started to see the potential of blockchain.
Applications of blockchain
The following examples are already in use or it can simply be implemented today making use of existing technology.
Electric power micro grids
This example shows how blockchain can be used by entities of any size. This actually means that, blockchain is not only for the big players. Smart contracts can be used to redistribute lots of power from solar panels. The Transactive Grid is an application that is running on blockchain to redistribute and monitor energy in a neighborhood micro grid. The program normally automates the selling and buying of green energy just to save costs and then pollution. The Ethereum platform is the technology used for running the program, and it is designed for building smart contracts of any kind.
Cold chain monitoring
Often food and pharmaceutical products need special storage. Also, most enterprises also see the value in sharing distribution centers and warehouses, rather than each one paying for its own. Sensors on some sensitive products can easily record humidity, vibration, temperature and other items of interest. These readings can then be easily stored on blockchain.
They are tamperproof and permanent. If a storage condition is not able to meet what has been agreed, each member of the blockchain will simply see it. A smart contract can easily trigger an action just to correct the situation. It normally depends on the size of the deviation; this action can simply be just adjusting the storage. But, it could also extend to applying penalties, changing “use-by” dates, or declaring products unfit.
Automotive supplier payments
Blockchain normally let the transfer of funds anywhere in the world. It does not need traditional banking methods and transfer is done directly between payer and payee. It is very secure and fast – in minutes, when compared to days for automated clearing house payments, for instance. Bitcoin actually transfers specifically and it also gives fees that are very low.
The manufacturer of Australian vehicle by name Tomcar normally makes use of bitcoin to pay suppliers. Currently, there are three partners in Taiwan and Israel that accept this. The supplier agreements of Tomcar normally use standard terms. The advantage here is in the cost savings. Also on the other hand, the company is very careful to prevent hanging onto a lot of bitcoin. Although, bitcoin has become international by nature, some national governments actually see it as a very good way for companies to make an investment. Firms with bitcoin holdings may therefore be taxed accordingly.
Making use of blockchain, product status at each stage of production can easily be recorded. The records are always permanent and inalterable. They normally allow the tracing of each product to its very source.
Walmart which is a global retailer make use of blockchain to simply track sales of pork meat in China. Its system usually allows the firm sees where each piece of meat comes from, its storage and processing, and then sell-by date. Also in the event of product recall, the firm can also see which batches are concerned and who purchased them.
RFID-driven contract bids and execution
RFID tags are mostly used in supply chain to store details about products. The tags can be read automatically and easily, and then processed by IT systems. Now, the logic goes, why not make use of them for smart contracts for logistics?
The practical steps could be as follows. RFID tags for cartons or pallets store details on delivery date and location. Logistics partners normally run applications just to look for these tags and then bid for delivery contract. The partner that is offering best service and price gets the business. A smart contract will then have to track status and final delivery performance.
Blockchain and Internet of Things
There are some other ambitious and ideas which come from using blockchain and IoT. One good suggestion is for smart contracts to simply manage rentals of cars that are driverless. A smart contract can simply check for rental payments. At the end of the rental contract or if payment has not be made as at when due, the smart contract can easily lock the car and then tell it to drive itself back to the renter.