Satoshi Nakamoto’s whitepaper on bitcoin did not use the word Blockchain but it has created quite a few waves in the market since its advent.
What is a blockchain, one tends to think? It is a data structure that allows creation of a digital ledger of transactions and sharing of it in a distributed network of computers. Cryptographically, each participant on the network is allowed to manipulate the ledger in a secure way. There is no need for a central authority.
It is essentially a secure, distributed, and shared database, just like bitcoin. Just like bitcoin, it is shared ledger of data and nothing more.
Sneek-peek into use cases of Blockchain:
Digital Assets & Stocks
Some powerful and exciting use-cases for the blockchain technology are assets, stocks, and other digital tokens on the blockchain. It lets users exchange stocks, bonds, tickets, reward points, digital keys, and other assets like bitcoins. The security aspect of blockchain is used for advantage in these applications.
An example of digital assets on the blockchain would be Stocks. Instead of using NYSE or NASDAQ to issue its shares, a company could use colored coins on the Bitcoin blockchain for the purpose. In this way, shares could be exchanged and traded digitally in a very smooth manner. No middle-man would be required to approve or verify the shares. This will help users to access facilities in more developed countries.
Another example would be a car key. When we purchase a used car, we physically have to deliver the car, its title, and the key. In the future, we could make the car titles public on the blockchain and the key digital. All the data could be easily verified. The owner would only need to send the key digitally and the buyer would easily use to start the car.
Exchanges like ShapeShift.io is an example of how efficient the stock exchange system could become by using the blockchain technology.
Smart contracts is quite helpful for trustless financial services like loans, automatic execution of trade agreements, micropayments, and more. Rootstock is a blockchain based project that aims to bring smart contracts to bitcoin via sidechains. It is backwards compatible with Ethereum, which is another blockchain aiming to bring Turing-complete contracts to finance.
Smart contracts on the blockchain can also build on top of digital assets and stocks. Thus, since financial contracts are automatically executed with no third parties involved, it lessens the need for lawyers, banks, and other professional services.
The record keeping systems can be revolutionized by Blockchain as well. Data hashed and saved into blockchains create immutable and unforgettable information.Various projects like Factom and Tieron use the Bitcoin blockchain to create “blockchain receipts”. All data is verified through the Bitcoin blockchain and the need to involve a third party is eliminated.
A New York based startup, called OneName has created an identity system using the Bitcoin blockchain. It allows users to create blockchain IDs, which very soon, will help them log in to websites without the need of passwords.
Cloud Storage can easily be touted as the future of data storage. There are cloud storage projects like Storj that intend to use blockchain technology to share files in a decentralized network. It will allow users with extra disk space to rent out unused storage space to users in need of cloud storage space. They can pay to store files on computers across the network. According to Storj this system is likely to cut costs of data storage by about 80%.
Blockchain has applications in transportation industry as well. La’Zooz, for instance is a blockchain based ride sharing facility that rewards its users, developers, and drivers with tokens called Zooz. How La’Zooz is different from other ride sharing facilities like Uber is that Uber having a central authority can be limited or shut down by the governments in order to protect the existing taxi systems. However, La’Zooz has no central authority and hence, unlike Uber, it cannot be blocked or shut down by governments.
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