The idea for blockchain technology first emerged in 1991 and was actualized in 2008 through bitcoin by the developer(s) under the pseudonym Satoshi Nakamoto. Since then, the blockchain industry has accumulated a staggering worth of $5.88 billion and is anticipated to reach $394.60 billion by 2028.
So why the hype? What are the practical use cases for a blockchain network, and out of all those cases, which holds the most promise for startups and larger corporations today? How does bitcoin and digital currency fall into the picture? Today, we’ll cover a basic introduction to blockchain technology and the most promising use case for blockchain.
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Blockchain technology boasts decentralization, transparency, immutability, security, and traceability. Blockchain technology uses involve authenticating intellectual property, tracking financial transactions, boosting cybersecurity, and establishing proof of work. To fully understand blockchain technology, you’ll need to understand the various layers behind this technology. I’ll break it down into a series of steps and paint the complete picture at the end.
Imagine a block of data. Inside that block, there are three different sets of data:
When a new block of data is generated, that block is chained to the genesis block (original block) to start the chain. In summary, it’s a chain of data linked by a specific code for each block in the chain.
Blockchain technology is based on a distributed ledger system and a lack of central authority. Unlike most data services where data is stored in a centralized server architecture, distributed ledger technology (DLT) keeps the data across an ecosystem with several nodes, which creates a peer network.
For example, think of a person writing on a piece of white paper, then distributing copies of the paper to 100 different people. To change the information on the paper, a hacker would have to go to a majority of people holding the paper and change the information all at the same time.
This feature makes blockchain technology strongly resistant to tampering or hacking and compels financial institutions or healthcare companies to invest in blockchain technology.
Aside from mainstream usage for transaction information, blockchain’s most promising use case is traceability. Mainstream usage of blockchain focuses on cryptocurrency exchange because blockchain technology best supports smaller chunks of data in a sequenced format similar to business transactions.
Looking forward, companies will continue to build blockchain technology as a real-world solution to solve the problem of tracing sources and proving authenticity of their product. Blockchain technology’s properties of immutability, transparency, and decentralization give both customers and corporations a compelling source of trust. Several large companies understood the value of blockchain as a record keeping tool and developed products based on blockchain technology.
Data storage still needs more time to be a scalable solution to decentralized storage, and cloud storage continues to outscale blockchain solutions in efficiency and cost.
Problem: During the romaine lettuce E.coli outbreak in 2018, corporations spent days searching for the outbreak source.
Solution: Walmart deployed blockchain technology through Hyperledger Fabric to solve supply chain management for dozens of produce products.
Problem: Counterfeit luxury goods market is estimated to be about $12 billion, and luxury retailers lose significant revenue from the counterfeit market.
Solution: LVMH deployed blockchain technology through AURA, Quorum, and Ethereum blockchain to track and authenticate over 10 million luxury products through digital assets.
Problem: Used airplane parts hold a high level of scrutiny for more valuable components such as engines or auxiliary power units, but tracking parts’ origin and usage can be time-consuming and lack transparency.
Solution: Honeywell deployed blockchain technology through open-source Hyperledger Fabric and GoDirect Trade to convert documents onto a blockchain ledger for customers to track parts.
Blockchain technology employs specific supported program languages like Go and requires several technology prereqs to understand blockchain. Educative Teams empowers you to build learning environments tailor-made for your software developers and starts with a free trial.
Whether your corporation is looking towards blockchain technology to solve a problem with supply chain management, identity authentication, or transaction processing, here’s a head start on understanding how to set up your blockchain technology best suited for your company’s needs.
The first step to building a blockchain application is learning how blockchain technology works and provides value to your company. I wrote a summary and presented examples above for how blockchain technology works and provided a solution to several large corporations. Still, there are several other resources I found helpful along the way. Consider taking a look at the following resources:
The first step to building a blockchain application is choosing the proper framework. Here are different blockchain frameworks to choose from:
Enterprise Ethereum (ETH)
When choosing a blockchain framework, consider the following attributes for every framework:
Smart Contract Language
private blockchain vs. public blockchain
Blockchain technology is still relatively new, with slim pickings for engineers specialized in blockchain systems. Hiring new engineers is a costly endeavor in both time and resources.
Finding ways to reskill or upskill your engineers in blockchain technology serves two purposes:
Engineers that feel stagnant in their roles search for new opportunities, while retention rates rise amongst engineering teams met with exciting and innovative challenges.
Blockchain technology continues to rapidly grow and companies collectively invest millions in building blockchain solutions. Amazon, JP Morgan, and various fintech companies have already begun looking into blockchain to bring traceability and transparency in financial services.
To wrap up, the best use case for blockchain technology is traceability for your company’s product. We covered how other companies use blockchain technology to solve complex supply chain problems and create trust with their customers through a public ledger. We also covered how to get your company started on blockchain solutions.
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