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Cryptocurrencies were all the rage in 2017, and blockchain technology is to thank for that. Let’s take a look at the potential uses for this revolutionary technology.

A blockchain is an open, distributed database – essentially, a computer file for storing information (data). The name comes from its structure: the file is made up of blocks of data, and each block is linked to the previous block, forming a chain. Each block contains data (such as transaction records), plus a record of when that block was edited or created.

Crucially, unlike, say, a centralised database that’s owned by a company or government agency, a blockchain isn’t controlled by any one person or entity. The data is duplicated (distributed) in its entirety across many computers, meaning any user can view the entire chain from anywhere, and anyone with the right cryptography keys can edit the chain. The fact that it’s a decentralised way of storing and accessing data makes blockchains incredibly secure – because, unlike a centralised database, there’s no one single point of entry for attackers. This makes it particularly useful for recording transactions in a secure manner.

Blockchain is the vision of developers who believed that the current banking system had flaws. In particular, they viewed banks acting as third-parties and pilfering transaction fees as unnecessary, and they scoffed at the idea that payment validation and settlement could take up to five business days in cross-border transactions. With blockchain, real-time transactions are a possibility (even across borders), while banks are left out of the equation entirely, presumably reducing transaction fees.

There are other uses for blockchain, too, beyond the currency setting. 

You’re probably wondering what this potentially game-changing technology can actually do in the real world. Well, wonder no more…

1. Payment processing and money transfers

Arguably the most logical use for blockchain is as a means to expedite the transfer of funds from one party to another. As noted, with banks removed from the equation, and validation of transactions ongoing 24 hours a day, seven days a week, most transactions processed over a blockchain can be settled within a matter of seconds.

2. Food safety

Yet another intriguing use for blockchain could be in tracing food from its origin to your plate. Since blockchain data is immutable, you’d be able to trace the transport of food products from their origin to the supermarket. What’s more, should there be a food-borne illness, blockchain would allow the source of the contaminant to be found considerably quicker than it can be now.

3. Workers’ rights

Another interesting use for blockchain is as a means to bolster the rights of workers around the globe. According to the International Labour Organization, 25 million people worldwide work in forced-labour conditions. Coca-Cola, along with the U.S. State Department and other partners, is working on a blockchain registry complete with smart contracts — protocols that verify, facilitate, or enforce a contract — to improve labour policies and coerce employers to honour digital contracts with their workers. 

4. Equity trading

At some point, blockchain could rival or replace current equity trading platforms to buy or sell stocks. Because blockchain networks validate and settle transactions so quickly, it could eliminate the multiday wait time investors encounter when selling stock(s) and seeking access to their funds for the purpose of reinvestment or withdrawal.

5. Managing Internet of Things networks

Networking giant Cisco Systems may be behind a blockchain-based application that would monitor Internet of Things (IoT) networks. The IoT describes wirelessly connected devices that can send and receive data. Such an application could determine the trustworthiness of devices on a network — and continuously do so for devices entering and leaving the network, such as smart cars or smartphones. 

While blockchain is far from perfect, it certainly has plenty of real-world applications. Watch this space…

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