When you think of blockchain, you most likely think of bitcoin. Bitcoin is the most widely used application of blockchain technology. However there are plenty of business use cases beyond it where businesses can leverage the distributed ledger.

Companies are eager to adopt the technology and reap its benefits. Blockchain FOMO (Fear Of Missing Out) is real.

Start your blockchain technology journey by reading this free Blockchain Adoption Kit Ebook.

A growing number of businesses putting up “bitcoin accepted here” signs is one thing, but it will be companies that find applications for blockchain beyond bitcoin that will benefit from the full potential of the cutting edge technology.

There is still much noise around blockchain and such hype obviously encourages also false and fraudulent applications.

One is certain though, if we cut out the unnecessary buzz, decentralized networks and smart contracts can revolutionize the process for operating in various business areas, if the right problem is addressed with the right technology.

When did it all start?

The first blockchain was conceptualized by a person known as Satoshi Nakamoto in 2008. No one knows who Satoshi is, as he never left a single digital footprint of his true identity.

He is personed as a designer of bitcoin and creator of its original implementation — a digital currency experiment. Later on a technology underlying the Bitcoin algorithm was separated and called blockchain.

If you want to listen to Satoshi Nakamoto Bitcoin Whitepaper, here is the audio version.

How does blockchain work?

The concept of blockchain is relatively easy to understand.

Blockchain is an electronic ledger (digital database) which keeps an unchangeable record of data operations. These operations are grouped in “blocks”. The data is decentralized and stored across the network. Each and every block is linked to the previous one and time-stamped. These links create “chains”. Every operation on the data is recorded and confirmed anonymously in a form of a record of events that is shared between many parties. This way blockchain removes the need of a middle man and allows you to connect directly with the dataset stored in the network.

As you see, in blockchain there is no central point of vulnerability to be exploited. The technology is transparent and safe. Each generated record (entry in the database containing information) is verified by most devices and permanently saved. This is important: once created entry cannot be removed from the database.

The concept of decentralised database isn’t new, but technology needed for its implementation wasn’t available until relatively recently.

From the IT perspective, blockchain transactions are based on asymmetric cryptography and two keys: private and public. In practice, it works as follows:

a sender creates transactions using his private key; a transaction is being sent to a network node and it awaits to be taken into the block. Miner calculates the next block of blockchain. the block is broadcasted to the network; the network verifies the block based on a consensus algorithm that decides which copy of data on the network is valid and which is invalid by keeping track of the entire blockchain; when verified, the block is added to a chain which represents an indelible and transparent record of transactions; the transaction is completed.

Smart contracts and Ethereum

There is especially one cryptocurrency businesses and software developers are truly excited about. It’s called Ethereum.

In 2013 Ethereum introduced a new and exciting concept, today known as a smart contract. Ethereum’s ledger may contain not only balances but also computer programs. Such programs provide functions that might be called and that can store their states on the blockchain.

Our developer, Łukasz dug into Ethereum and smart contracts and you can read about his pet project “payments gate for e-commerce” here.

What are smart contracts?

Smart contracts are computer protocols intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract.

They can be compared to how vending machines work. A person who inserts coins “trusts” that at the time of payment, the machine will release a drink or a candy bar. The same with smart contracts, they don’t require third parties involvement in a processes, while providing higher security (all the transactions are trackable and irreversible) and reducing transaction costs.

When we mention smart contracts, we also should mention native tokens. They are a first example of mass smart contract use and they are used to encourage a disparate group of people who do not know or trust each other organize themselves around the purpose of a specific blockchain. Tokenization is the new layer of security for digital payments.

Smart contracts on the Ethereum Blockchain enable the creation of tokens with complex behaviours attached to them. As part of a private network, a token can be used to grant ownership, to pay for work or to transmit data, as a trigger, as a gate to additional services or to provide better user experience, basically in any case that a person or organization design.

How blockchain can leverage different businesses?

Decentralized networks and smart contracts are already revolutionizing various industries. More efficient, transparent, scalable and immutable enterprise blockchain products are being developed in healthcare, finance, supply chain management, insurance, transport, media, government and many more. You name it.

“In fact we are going back to history by enabling a peer-to-peer (p2p) system. From barter system to cash, Blockchain is going back to empower end users with a p2p system, eliminating middlemen” — Mano Thanabalan, Otonomos BCC Pte Ltd.

Gartner in its report: “Blockchain + WAN Edge = Leading the Digital Transformation” predicts that by 2030, 30% of the global customer base will be made up of things that use blockchain as a foundational technology to conduct commercial activity.

Below are some of the blockchain projects that are already under development or in use:

Insurance: AXA turns to smart contracts for flight-delay insurance

Government: The Republic of Georgia uses blockchain to validate property-related government transactions

Energy: Blockchain grid to let neighbours trade solar power in Australia

Supply Chain Management: Provenance makes opaque supply chains more transparent so consumers can make informed decisions on the moment of purchase

Energy: The Brooklyn microgrid:

Like with every innovative technology in its early stage of adoption, there are still some grey zones that need to be considered and addressed.

Gartner listed them in their Issue about blockchain:

Gartner: Blockchain + WAN Edge = Leading the Digital Transformation

Blockchain on SXSW 2018

During the latest SXSW 2018 conference blockchain was a huge thing. We went to Austin, participated in plenty of blockchain panels, and it seems like finances, healthcare and supply chain management are the leaders in the blockchain adoption.

Benefits of blockchain technology in Healthcare

Healthcare system is a distributed area with many stakeholders and actors. Additionally there are highly sensitive medical data that need to be processed and managed in an adequate manner. Blockchain can improve healthcare system by enabling:

increased accuracy of diagnoses due to the data portability and interoperability of records within the healthcare ecosystem;

improved treatments due to faster and more accurate diagnoses;

cost-effective care due to higher efficiency and lower administration costs which are one of the major pain points in healthcare sector.

Benefits of blockchain technology in Finance

Blockchain facilitates the needs of finance sector by removing a lot of middle parties and enabling a significant amount of time and money being saved. Blockchain allows for:

better capital optimisation, due to a significant reduction in operational costs;

automatic settlements with the use of smart contracts under the control of an incorruptible set of business rules;

increased transparency among financial institutions;

very detailed audit trail available which eliminates error handling.

Benefits of blockchain technology in Supply Management

Blockchain can handle event data and document workflow by enabling trustless and transparent monitoring of transactions. In result we get:

reduced time delays;

little or none added costs;

less human errors.

How you can integrate blockchain into your business?

The common knowledge about blockchain is still not spread widely enough and customers are unfamiliar with how the technology really works. Moreover, there are not too many people who can REALLY explain the concept to the wider audience.

But the opportunities are out there and with more projects being developed and overall stronger blockchain community coming together, it’s just a matter of time before we stop seeing blockchain technology as too hard to implement.

Are you dealing with data ecosystems?

Do you think blockchain can benefit not only your digital transformation but most of all, your clients?

Here are some benefits blockchain brings to the table.

Blockchain gives an opportunity to radically transform the way we do things by providing a standard architecture to address different business challenges. If you want your business to reap blockchain’s benefits to gain competitive advantage, prepare yourself.

Educate yourself. Understand blockchain beyond it being just a cryptocurrency or transaction platform. You don’t have to be on a software engineer level, but you should know how the technology works and what it brings to the table. Be innovative. Blockchain is not about doing something cheaper or faster, but rather about doing something different. With the distributed technology you can implement new business models and eliminate inefficiencies. This creates a value that allows you to go after new clients, offer new types of services. Free up room in a budget and hire an in-house expert or find a good technology partner.

Have a blockchain project in mind?

Blockchain technology has a lot of advantages, but it also has flaws and limitations. If you want to implement your business idea using blockchain, you should take advantage of the possibilities blockchain offers and, at the same time, avoid cons it has.

We can help you design blockchain application tailored to your business needs and leverage the benefits of the decentralized ledger.

Have a project in mind?

We understand blockchain nuances and we will make technology work for your business. Contact us!

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