Blockchain technology offers the possibility to use it to generate trust, security, and transparency among people and entities that do not necessarily know each other and to bring great business opportunities in sectors where bureaucracies and intermediaries exist.
The Principle of Bitcoin and Blockchain Of the virtual currencies created over the past decade, bitcoins are arguably the most popular worldwide. Developed in 2009 by one or more programmers using the pseudonym of Satoshi Nakamoto, this cryptocurrency has the particularity of exchanging from person to person against other currencies, without going through conventional banking networks.
It can be used as a means of payment on certain online sales sites that accept their use. Without a legal framework unlike traditional currencies, this virtual currency has no legal tender or regulated value by a central bank. Its creation was made using a technology called " blockchain ". It is a " chain of data blocks " that can be compared to a gigantic virtual, anonymous and public register at the same time, which brings together all transactions made by users.
The blockchain is a technology that allows users to have more confidence and security compared to traditional institutions such as banks, lawyers, notaries, among others. It allows for financial transactions online without any intermediary, a revolution that makes unnecessary banks and all third-party sites. This is due to the fact that this technology ensures that the transactions we make through it are registered in many places, and once verified, it is practically impossible to modify them.
To understand the potential of this technology and its relationship with bitcoin, consider that if your smartphone were blockchain, bitcoin would be just one of the applications installed with solutions for the financial sector, and you can create many more for other sectors of the economy.
Blockchain applications in different sectors
Blockchain also has the potential to be applied in sectors other than financial as in transportation. Consider the case of Uber, who connects drivers with users through a technological platform, makes quality processes for drivers and vehicles, selects the nearest car, calculates the journey and the fare, and finally receives payments from passengers with a charge between 20 or 25% of the total paid by the user.
Most of these activities could be done using blockchain technology, where communities of developers and designers would be compensated according to the work they do, and decisions on platform improvements would be made through community consensus. By eliminating the intermediary, savings will be generated that will make the user charge less than the 20% currently charged by Uber. There is an enterprise called Arcade City (Decentralization and the future of ridesharing) is developing this blockchain platform.
Another application opportunity is to track the supply chain of companies, registering in blockchain from purchases to suppliers, processes in the production chain, sales, customers, etc. As in blockchain once a record is made and verified, it cannot be modified, making public the information of the supply chain translates into the transparency of the company, capturing customers who each day will value more the products of ethical and transparent companies. This proposal, which combines monitoring of the supply chain and making the information public to its users, has been led by the British project called Provenance (Every product has a story).
With smart contracts, the technology that works on Ethereum, another cryptocurrency that uses blockchain as bitcoin, we will no longer need notaries or lawyers to carry out agreements between people, institutions, companies or devices connected to the internet. By establishing conditions that each party must comply with, the intelligent contract is designed, where once the conditions are met, the contract is executed automatically and autonomously.
In the music sector, a market so big that it is difficult to know someone who does not like at least one song, there is a permanent complaint from artists to receive a minimum part of the sales of their productions. The vinyl records, the cassette, the CD, the mp3, music in the cloud as Apple music, or streaming as Spotify or Deezer, have made the intermediaries earn more than the artists.
A project led by the company Mycelia seeks that artists have a direct relationship with their fans through blockchain, without intermediaries. Mycelia uses smart contracts from Ethereum to establish conditions of intellectual property use of the song. For example, if the song is played via streaming, a micropayment is made; if it is a download, the license is different and the micropayment is also different, if it is a ringtone, or if the song is used in the background in a commercial, the conditions vary and the collection is different. All these conditions and forms of compensation can be programmed in blockchain and are executed automatically, safely and without intermediaries.
Evolution of business models
Another important aspect to highlight is the challenges presented by the enterprises that use the blockchain technology, since they are discovering their own business models, for this a different mentality is needed by the entrepreneurs, similar to the change of mentality and the identification of new business models as in the past lived traditional businesses when moving to electronic commerce.
Blockchain and bitcoin are two innovations that should not be overlooked. E-merchants have a definite interest in opening up to the use of bitcoins. The virtual absence of transaction costs, the reduction of the risk of fraud and the opening of a brand-new market are all undeniable advantages. Over the next few years, however, the potentialities of unmediated transactions can become very important, which is why it is interesting to become familiar with this technology now.
In conclusion, blockchain technology offers us the possibility of using it to generate trust, security, and transparency among people and entities that do not necessarily know each other and to bring great business opportunities in sectors where bureaucracies and intermediaries exist. The opportunity is for those who discover the new applications, culture, philosophy and business model suitable for decentralized businesses, they will be those who lead the Google, Facebook, Apple, of the future.
Melissa Crooks is Content Writer who writes for Hyperlink Infosystem, a mobile app development company based in USA & India that holds the best team of skilled and expert Indian app developers. She is a versatile tech writer and loves exploring latest technology trends, entrepreneur and startup column.