The technology's potential goes far beyond digital currency.
Blockchain technology can be understood as a public database, accessible across a digital network that can monitor, authorize and record transactions. The technology reduces the need for a middleman or financial institution, since everyone can see the ledger of transactions taking place.
Though the blockchain was developed as a system for payments, the technology's potential applications are endless. As it turns out, blockchain can be used for everything from the fair and legal sharing of online music to land registrations. Here are a few uses of blockchain that have nothing to do with global finance, but a lot to do with other, equally important aspects of business operation.
1. Cloud storage
With most online storage, your data resides on a central server, which delivers your web content when visitors click through to your page. With that cloud usage comes buffering.
A content delivery network is a network of computers that ease that situation. A CDN vastly reduces or even eliminates buffering, because servers around the world will have copies of your data, and upon request, the closest copy can be sent directly to you.
While current cloud storage services are centralized, blockchain can decentralize them. For example, Storj has developed cloud storage that uses a blockchain-powered network with heavy encryption. It allows business to store digital objects in the cloud with greater security and faster delivery. Businesses can even rent out their surplus storage.
2. Processing power
When users mine cryptocurrencies such as Bitcoin, they place their computers into a network that collaborates to complete complex calculations. The Golem Project takes another approach besides generating currency, utilizing the power of mining to offer massive computing power for tasks such as machine learning, graphics rendering, big data analysis, cryptography and science computations.
By harnessing the blockchain, the millions of machines that sit idle for most of the day can be deployed to meet the growing demand of businesses for computing resources, economically and efficiently using existing computing power that would otherwise be redundant. Organizations that need more processing power than their current system offers can rent a PC or data center through Golem's network to create their own supercomputers.
3. Smart contracts
Smart contracts are programmable digitized contracts entered on the blockchain. Because the blockchain is encrypted and features a timestamp, smart contracts could someday replace the need for notaries and legal oversight. The blockchain network validates data for a particular time and confirms the existence of a legally binding agreement. Whereas a traditional contract defines the terms of a transaction, a smart contract can enforce those terms.
How does it work? Like vending machines, smart contracts operate on if-then scenarios. If you drop a coin in the slot, a bag of chips will fall out. In the case of a smart contract, payment in cryptocurrency is automatically processed upon delivery of product or service.
Say, for example, two people agree to pay $100 upon delivery of a particular piece of content. The smart contract would specify payment details, conditions, timeframes, the parties' identities – everything a traditional contract normally includes. When the predefined conditions are met, the funds are automatically released, per the agreed-upon terms.
Contracts, legal paperwork and other business documents are frequently sent back and forth between parties who edit and update them each step of the way. The process makes identity as well as version control a real battle. Perhaps blockchain can provide a solution. Digital signatures, for example, can deliver unique digital identities for every version of a document.
Combined with the extra encryption of the blockchain and the coded automation of processes, smart contracts can offer practically any industry a cost-effective way to increase the efficacy of business agreements. Smart contracts ensure a very specific and limited set of computer-guaranteed outcomes that avoid confusion and the potential for litigation.
4. Digital identities
Identity authentication is intricately woven into the fabric of worldwide commerce and culture. Whether in banking, healthcare, travel, citizenship, national security or online retail, identity verification and authorization are paramount to daily function. But what happens if you can't provide the proper paperwork? That daily functioning comes to a grinding halt. Even worse, what happens when your carefully honed digital identity is stolen and used nefariously? Proving who we aren't can be far more difficult than proving who we are.
Blockchain technology can track and manage digital identities both efficiently and securely. It does away with the weakness associated with passwords-based systems. Built on public key cryptography, blockchain uses digital signatures that can verify individually owned private keys.
Many organizations are now working on digital authentication platforms using blockchain technologies. The various systems provide verifications of not only digital identities, but also passports, residency, birth certificates, wedding licenses and government-issued IDs.
Digital identities can be used for far more than website access and online shopping. We live in a world where around 1.5 billion people have no way of proving who they are. The consequence for some means restricted access to essential services. Companies are eager to reduce this problem by creating a verification process that allows people to register their identity in a cross-blockchain fashion, irrespective of the blockchain they are using. Such a system would provide users with a single namespace for lookup.
Because the solution is self-governing, it can be considered a user-owned asset with time restrictions and accessible only by third-party entities that have a need to know.
5. Personal assistants
Personal assistants, previously referred to as secretaries, have been a staple in corporate America for years. Their roles range from getting coffee and making copies to booking travel and managing finances. With the evolution of technology, a lot of these jobs have moved from in-house to outsourced.
Virtual assistants have largely taken over these roles, and for good reason. You can give a VA a task with one email, and suddenly your to-do list is done. With artificial intelligence becoming more available, chatbots are being applied to anything from customer service to insomnia. These bots can interact with people in conversation form to collect information, answer questions and more. As AI continues to be applied to these types of technology, efficiency will skyrocket.
In January 2018, the Nami Assistant was unveiled at the iFX EXPO in Hong Kong. The Nami Assistant is an AI application that studies the financial markets on a second-by-second basis to determine financial risks and automate investment. This technology signals a groundbreaking shift in AI where more and more complex tasks are intelligently automated.
6. Digital content
Remember Napster? Remember how consumers around the world fell in love with unlimited free music downloads? And remember how the music industry vehemently fought against the open sharing of its creative works?
While Napster's original platform was stripped from the web, the legal licensing and sale of online music has been a problem ever since. By the time artists pay cumbersome administrative fees to middleman agencies that distribute their online content, there often is little left to keep the lights on in the studio. And increasing the costs to even the score will only push consumers toward illegal downloads.
Within the music industry, blockchain offers new hope to artists by allowing them to sell content directly to fans while also solving licensing issues. The Ujo release of the song "Tiny Human" by Imogen Heap is one example of blockchain application in the music industry. To access the content, people purchase the license that allows them to stream and remix the download. Using a smart-contract system, funds are automatically divided between and distributed to the involved parties.
Blockchain could revolutionize more than music content distribution. Increased use of ad blockers has made many of the traditional business models for content and advertising redundant. Though paywalls appear to be working for some publishers, there is also evidence that people will only complete the transaction where the process is quick and easy. In the world of blockchain, this is being achieved by doing away with subscriptions in favor of tokens that can be traded for articles.