Blockchains: how can they be used?
How can this this technology be used in the real world?
It’s a distributed database that everyone can get a copy of. Every person with a copy can add new records to this database but cannot change any record once it’s in there. This property makes a blockchain great to record data in a transparent way because everyone gets to see what’s in it.
Bitcoin (one of the many cryptocurrencies) allowed people to directly transact with one another without having to trust third parties like banks.
Ever heard of odometer fraud?
By tampering with the odometer someone can make a car appear to be newer and less worn out, resulting in customers paying more then what the car is actually worth. The government tries to counter this by collecting the mileage of cars when they get a safety inspection.
So, in the contrary, we could replace regular odometers with smart ones that are connected to the internet and frequently write the cars mileage to a blockchain. This would create a secure and digital certificate for each car. And because we use a blockchain, no one can tamper with the data and everyone can lookup a vehicle’s history.
In fact, this is already being developed by Bosch’s IoT lab and they are currently testing it on a fleet of 100 cars in Germany and Switzerland. So blockchains are great at keeping track of things over time.
It can also keep track of things like intellectual property or patents or it can even function as a notary.
Digital Voting
Right now voting happens either on paper or on special computers that are running proprietary software. Voting on paper costs a lot of money and electronic voting has security issues. In recent years we’ve even seen countries move away from digital voting and adopting paper again because they fear that electronic votes can be tampered with and influenced by hackers.
We could use blockchains to cast and store votes. Such a system would be very transparent as everyone could verify the voting count for themselves and it would make tampering with it very difficult. The Swiss company Agora is already working on such a system and it’s going to be completely open source.
But there are many challenges.
First, you have to be able to identify voters without compromising their privacy.
Secondly, if you allow people to vote with their own computers or phone, you have to take into account that those might be infected with malware designed to tamper with the voting process.
And a final example: a system like this also has to be able to withstand denial-of-service attacks because that could render the whole thing unusable.
Definitely, a tough nut to crack but if it becomes reality it could make for a more transparent and practical voting system.
Food Industry
They could use blockchain technology to track their food products from the moment they are harvested or made, to when they end up in the hands of customers.
Food-borne diseases are a serious concern. It takes too long to isolate the food that is causing harm. Blockchains could help us to create a digital certificate for each piece of food, proving where it came from and where it has been. So if a contamination is detected, we can trace it back to its root and instantly notify other people who bought the same batch of bad food.
Walmart and IBM are currently working on such a system. It allowed them to trace the origin of a box of mangoes in just 2 seconds, compared to days or weeks with a traditional system.
We could use it to track regular products and battle counterfeit goods by allowing anyone to verify whether or not the product comes from the manufacturer you think it does.
It can be used to track packages and shipments by using a blockchain. That is something that IBM and container shipping giant Maersk are working on: a decentralized ledger to help with making global trade of goods more efficient.
Blockchains can be used to keep track of information and verify its integrity.
Smart contracts
These contracts are tiny computer programs that live on the blockchain and can perform actions when certain conditions are met.
Insurance companies could use smart contracts to validate claims and calculate a payout. Or they could allow us to only pay for car insurance when we’re driving.
They could for instance allow us to store our medical records on a blockchain and only allow doctors to access them when we approve it with a digital signature.
Ordering alcohol in a bar for instance only requires you to prove that you’re over the legal drinking age and with smart contracts, you can deliver that proof without revealing anything else.
Or think about collecting royalties for artists. A future streaming service could set up two smart contracts: one where users send a their monthly subscription to and other to keep track of what the user has listened to. At the end of each month, the smart contract that holds the subscription fee can automatically distribute the money to artists, based on how many times their songs have been listened to.
With smart contracts we can secure our own data on a blockchain. You could store your personal identity on there and choose what data you want to reveal.
