For the blue-collar worker, the driving force behind change was factory automation using programmable machine tools. For the office worker, it's office automation using computer technology: enterprise-resource-planning systems, groupware, intranets, extranets, expert systems, the Web, and e-commerce.
For the pioneers in cryptocurrency, the driving force behind change is the blockchain. This disruptive technology is the keystone of the credibility that Bitcoin and other digital currencies are enjoying.
Blockchain technology has revolutionized the role of trust in business. We know that a system using blockchain cannot be tinkered with. Not by any private company, not by any statutory regulator, and certainly not by the government. The beauty of the model is in its simplicity. A piece of information (the block) gets recorded on a virtual ledger (the chain), only after being verified by several thousand participants from all over the world. Once added to the chain, the record cannot be erased or altered.
It is a mechanism that allows each and every record to be traced back to its roots, hence giving more power to the people by being transparent and, so far, incorruptible. Having established its credibility in financial transactions, blockchain technology could potentially have applications in numerous other sectors:
There often is much hue and cry over rigged ballot counts during and after government elections. But with blockchain technology, voters could register and cast their vote using an app on their smartphone. Ballot manipulation and miscounting would be a thing of the past since, as we know, the blockchain is impervious to tampering.
Relief Project Payments
NGOs have to move money around the world all the time, and many of these places lack basic infrastructure—say you have to get funds to a project team on site: even something as simple as a confirmation of receipt can be problematic. Banks will usually handle this, but not without a significant fee. Tharparkar is an impoverished town in Sindh in Pakistan. After massive flooding in 2012, thousands of families became homeless. Finding a bank in the vicinity with which to make transactions was a challenge for relief teams—the closest bank was 100 miles away through flooded terrain. Something like BitPesa, a digital financial platform that connects African economics with the rest of the world, would have been extremely useful.
In June 2017, in addition to paper degrees, MIT awarded 111 graduates digital degrees on their smartphones. They were able to do this knowing that blockchain technology is secure and unalterable. This means that these graduates now possess and can share their credentials personally—without needing MIT to reissue them every time—without any concerns about their authenticity.
Compliance and Audit
Blockchain technology significantly reduces the margin of error in data entry—as we mentioned, a transaction cannot be altered once entered—thereby securing the integrity of the record.
The blockchain is spread over numerous servers in different parts of the world and is supported by a massive hardware infrastructure. A data storage platform based on blockchain can easily leverage the sheer mechanical capacity of the global network to provide faster uploads and downloads with greater built-in security. Check out Storj for one such example.
In a blockchain the ledge is untouchable, sacrosanct. A record on the ledger is there for good. This has an abundance of applications in the supply chain industry, especially for shipping and logistics firms. Consignments can be tracked with ease and without risk of errors in the handling of documents as goods are shipped from port to port. Factom is a prime example of how blockchain technology has been used by the supply chain industry to facilitate documentation—including inventory lists, letters of credit, financial compliance, customs clearance and invoices—through a unified digital platform.
We have all heard about money laundering and financial fraud wherein the money trail followed by a certain sum to reach a recipient usually gets lost mid transaction. Enter the blockchain with its verifiable ledger. Each time the amount changes hands, a record of that transaction is verified and entered in the blockchain. Everyone knows where the money went. No hiding possible there.
Money laundering and other financial fraud depends on missing links in the paper trail. Details get lost mid-transaction. But blockchain technology would render this problem obsolete: each time currency changes hands, a record of the transaction is verified and entered into the blockchain.