Picture courtesy of Blockchain Institute of Technology https://blockchaininstituteoftechnology.com

What do Microsoft, JPMorgan, Intel, Walmart, Mitsubishi, and IBM have in common? These large, public companies, from diverse industries, are making serious investments into blockchain technology, and betting that this frontier technology will usher in a new future of asset transactions.

What is blockchain technology?

Whereas the internet we use every day is the transfer, use, and presentation of data, the blockchain is the secure transfer of value over a network. Once transferred, these networks achieve consensus about the state of those assets without a central authority. However, blockchain technology has not yet reached mass adoption, but startups of all types are rushing into this space because of its transformative capabilities.

Here are 8 key takeaways to understand blockchain:

Decentralized. A blockchain is a distributed ledger that acts as a decentralized database, storing a registry of assets and transactions across a peer-to-peer network. Pseudonymous. A public registry tracks who owns what, and who transacts what, but only shares necessary information. In the case of a private blockchain, no one outside the network shares any data. Some blockchains incorporate advanced features that make transactions virtually anonymous. Encrypted. Cryptography secures all transactions, and blocks of data store the transaction histories securely and then linked together. These digital signatures reduce the risk of fraud or theft. Consensus. Users on a blockchain network achieve consensus on transactions, thus creating a new “block” shared with every network node. In other words, everyone agrees that the transactions are correct. There is no central authority validating the transactions. As these blocks accumulate, they create a chain of blocks that are impossible to change, hence blockchain. Immutable. These transactions are unalterable and completely auditable. The computational power or financial incentive required to crack not only the cryptography on one block, but on thousands of them, makes the blockchain incredibly secure. Smart. Rules, known as smart contracts, can be written with software so that transactions or events trigger other transactions. This programmable logic extends new capabilities to existing programmable services and processes. Redundant. When a data center goes down, or a telecom tower goes out due to a lightning strike, someone loses access to data due to the centralized nature of today’s internet. But with blockchain technology, a copy of the ledger is distributed across thousands of network nodes across the world, keeping an up-to-date copy at all times. If one node goes down, thousands of other nodes still have a copy. Disruptive. Any digital process that is today centralized and insecure, like say credit reporting agencies that get hacked, are ripe for disruption.

The real power of this new technology is its disruption of long-established methods of trust and verification. Blockchain will disrupt many industries you use today including banking and healthcare. The digital transformation enabled by blockchain will disrupt entrenched industries via disintermediation.

Disintermediation

Over the last couple of hundred years, intermediaries like banks, notaries, and driver’s license bureaus, established trust in transactions (financial, assets, or identity). With blockchain, trust is built without a third party or central authority. Blockchains can disintermediate these entities, establishing trust and improving processes. This disintermediation could dramatically reduce the friction and cost associated with trillions of dollars of transactions.

Where the internet we use every day is the internet of data, the blockchain revolution is the internet of value, sending assets or value over the web. Blockchain promises to fix many of the problems created by the internet like when hackers break into credit reporting agencies, and all of your personal data ends up on the dark web.

8 Real Use Cases for Blockchain

Here are some actual use cases for blockchain technology with real-world examples:

Finance. When it comes to the financial sector, blockchain technology can streamline payments quickly and securely, facilitating global transactions and minimizing the need for sophisticated financial ledgers. This innovation will transform the lives of millions of “unbanked” across the world. The Bank of England is currently rebuilding its settlement system for it to work with Blockchain. Healthcare. Today’s patient medical records are a fragmented patchwork of systems and databases with thousands of electronic healthcare record systems holding patient data. The access and security layers for these multiple systems vary leaving data accessible to bad actors. Imagine if, instead of relying on companies to manage your data, you could own your medical records and share access as you see fit? Several blockchain startups are working on the problem, but most recently Walmart patented a solution that stores patient records on a blockchain. Education. I recently spoke at my alma mater, Florida International University (FIU), during their Blockchain @ FIU Symposium. I shared how in the future, FIU could place university degrees on the blockchain. Instead of calling the registrar or the bureaucratic administrator of records, a student could tell a potential employer to go to the FIU blockchain and see their university degree online. Government. Another way blockchain technology could bring about much-needed change is with our voting systems. A voter’s identity could be verified using biometric tools like a thumbprint scan before voting on a mobile device. The voter’s data could be cryptographically protected to protect their privacy and at the same time enhance public trust. A publicly verifiable blockchain ledger could produce all voting results in real-time. Switzerland has begun trials of a blockchain-based voting system. Supply chain. Transactions can be monitored real-time, reducing time, waste, and inefficiency in every step of a supply chain. Products and cargo are tracked from the moment they leave the warehouse in China, board a trans-Pacific cargo ship, arrive at the Port of Los Angeles, onto a truck, to an inventory warehouse, to a delivery truck, to your front door. That process happens today but with a lot of inefficiency and intermediaries. The UK Food Standard Agency is piloting a blockchain program to improve transparency and compliance in the food supply chain. Real estate. Real estate is an industry full of intermediaries: title companies, attorneys, banks, mortgage companies, escrow companies, etc. Imagine a world of buyers and sellers instead using smart contracts to execute contracts, transfer title and ownership, and send monies (or crypto) without the need for title companies or attorneys. There are examples already of mansions going on sale and accepting Bitcoin as payment. Bapple Realty in Manhattan used the Zap platform to make broker commissions payments using a smart contract built on the Ethereum protocol. Energy management. Energy users and producers cannot buy excess energy directly but must instead go through public intermediaries. Leap is a startup that has taken a 90-megawatt stake in California’s distributed energy auction, through a distributed energy exchange that monitors excess energy and can hopefully increase power efficiency. Accounting. All business majors know the double entry accounting system of debits and credits, but how many have heard of triple-ledger accounting with blockchain? Let’s use inventory as an example. A smart contract could allow for the recording of a debit to inventory, a credit to accounts payable, and a third entry recording the inventory item(s) to the blockchain for tracking and asset control and significantly improving audits. SAP has been working with blockchain for the past three years.

There are dozens of other examples in the news recently, from cybersecurity to insurance, but yet blockchain adoption has not yet reached critical mass.

Driving Blockchain Adoption

So how do we drive mainstream adoption of this groundbreaking technology? Understanding blockchain technology can be a daunting task at first, as it involves a combination of software engineering, cryptography, mathematics, information security and data structures working at the protocol layer, not the application layer where most consumers of the internet interact. The challenge is to democratize the blockchain application, so anyone can use it or build with it. To create more access, we have to develop what Peter Diamandis calls the ‘user interface’ moment. That moment when a difficult-to-use technology exponentially gains adoption due to an easy-to-use interface. This is what happened to the Internet in the 1990s and mobile phones in the 2000s. As people built on these new platforms, they were able to create revenue-generating applications accessible to millions of people.

At 8base, we believe that is an achievable goal. We are working towards making deployment of blockchain technology easy and accessible to business people with limited technical proficiency. We will do this by creating a user interface that is so easy to work with and understand that anyone can use and adopt blockchain technology. We call these people “citizen-developers.” We are creating a suite of visual tools that allow people to quickly develop applications in hours (rather than weeks) and then connect those applications to the blockchain of their choice. We have partnered with both the Hyperledger Foundation (private blockchains) and the Enterprise Ethereum Alliance (public blockchains) to improve mainstream adoption.

We think of 8base as delivering the next layer of infrastructure for blockchain, bridging the gap between the protocol layer and the end user, while driving modern design thinking into application user interfaces, and we believe this will have a massive democratizing effect on the future of blockchain tech. We believe the user interface moment for blockchain is imminent.