Everyone has heard of blockchain but most consider that it is synonymous with cryptocurrencies, especially Bitcoin.
Since the rise and fall of cryptocurrencies with Bitcoin trading at $3,588.38 (at the date this article was written) from a high of $19,783.21 in December 2017, one might consider Bitcoin and hence blockchain is dead or of little relevance.
This could not be further from the truth.
Blockchain technology has far more applications that are being researched and exploited.
So what is blockchain?
A blockchain is essentially a continuously growing list of records. Its structure only allows data to be added to the database by authorised entities: altering or deleting previously entered data on earlier blocks is impossible. Blockchain technology is therefore well-suited for recording events, managing records, processing transactions, tracing assets, and voting.
The record system intrinsic to Blockchain technology (which is a form of distributed ledger technology or DLT) is being developed to forge tools to provide decentralised systems for the authentication and authorisation of a multitude of different products and services.
Blockchain’s Practical Uses
This week HSBC has claimed to have settled three million foreign exchange transactions and made payments worth $250 billion using distributed ledger technology. The bank's global head of FX and commodities said that it was now looking into using distributed ledger technology to help multinational clients with multiple treasury centres and cross-border supply chains to better manage foreign exchange flows within their organisations.
Blockchain is certainly not limited to facilitate financial transactions. Some examples for DLT and blockchain technology are:
• Loksys is a UK company that has developed blockchain to facilitate and streamline logistics operations. Using Bluetooth devices, items can be tracked, supply chain management simplified and automated and data reporting / analysis become less of a drag on administration.
• In the Real Estate arena property titles, transactions and historic values can be built onto the blockchain providing transparency and reducing the time and cost associated with transactions.
• For Stock exchanges. In a traditional stockmarket there is typically a delay of 2–3 days for settlement of stocks and bonds. Trading stocks on a blockchain is more cost effective and provides instant settlement.
• Proof of Ownership. Items that are purchased could be tracked on a blockchain to demonstrate proof of ownership and to prevent the sale of stolen goods which may eventually help to reduce crime.
• A decentralised world wide web, decentralised social networks and cloud storage are among many other avenues being explored.
Whilst cryptocurrencies are not enjoying the limelight as they once did they may return to prominence at some point in the future (although certainly more regulated). However the ascendancy of blockchain and DLT technologies appears to have only just begun.