Cryptocurrency is now part of the mainstream lexicon, but that’s a relatively recent development. After all, the first major cryptocurrency, BitCoin, didn’t come into existence until 2009 and it took a couple years before BitCoin really gained momentum. To create BitCoin, developers had to overcome some major obstacles surrounding recordkeeping. For instance, the cryptocurrency system had to be accurate so as to prevent “double spending,” whereby a user would have the ability to spend a sum of money twice due to delays updating the ledger. Enter blockchain, an innovative platform that has paved the way for cryptocurrency and many other technologies. In this blog, we’ll discuss more uses of blockchain they may be beneficial to your business.
What is Blockchain?
Blockchain is a distributed data storage platform that was created to serve as a highly secure ledger for BitCoin. Blockchain was designed to work as a recordkeeping database that would document transactions in an encrypted and indelible manner. Each record within blockchain is an individual unit known as a “block.” Multiple blocks are interlinked and chained together via encrypted connections. What’s more, the system is a “distributed” peer-to-peer system, meaning data is stowed in multiple locations or nodes. This decentralized configuration is far more resistant to sabotage and downtime.
Developers created a highly complex cryptography system to secure blockchain. In layman’s terms, the data is scrambled in a manner that is extraordinarily difficult for a hacker to unscramble. What’s more, blockchain’s creators designed a system that would resist unauthorized data modification. Just imagine the damage someone could inflict if they could revise financial records at will! Data modification is a key component in a hacker’s toolkit, so addressing this issue was paramount. The system records a transaction in a block and once that process is complete, it’s impossible to edit that single block without impacting all the blocks “downstream” along the chain. This tamper-evident system was precisely what BitCoin required.
Once blockchain was in place, the stage was set to launch a successful cryptocurrency. Blockchain serves as the worksite for cryptocurrency miners, who leverage powerful computers to document and authenticate transactions. In exchange for their work, the miners are compensated with freshly-minted BitCoins. As with any other currency, minting is a closely-controlled process since the release of too many new BitCoins would result in a currency devaluation. It’s a phenomenon that’s analogous to the economic inflation and deflation that can be observed with traditional currencies.
The Benefits of Blockchain-Based Cryptocurrency
Cryptocurrencies that use blockchain technology have many benefits over traditional currency, including:
- Independence from Government: Cryptocurrencies like BitCoin are created by the people, for the people, whereas traditional currencies are issued and managed by a government. This makes cryptocurrencies appealing to many, as they can be acquired and spent without any government involvement, taxation or oversight.
- Greater Stability: Cryptocurrencies feature far greater stability than traditional currencies, particularly from a political/social standpoint. Cryptocurrency and its value are not generally affected by political and social happenings, which is good news for enthusiasts.
- Solid Technology: Some of the world’s best and brightest minds work on blockchain and in the cryptocurrency field as a whole. Thus far, we’ve seen plenty of trailblazing activity, resulting in solid, secure technology that has earned a lot of trust. In fact, some place even more trust in blockchain and cryptocurrency since it’s operated independently from any political or social agendas.
- Full Privacy: An increasing number of individuals are turning to cryptocurrency because it is fully anonymous and completely private. The traditional financial system is increasingly subject to oversight, monitoring and even restriction. This has prompted many to turn to cryptocurrency in an effort to maintain their privacy and anonymity.
Of course, there is a potential downside to blockchain-based cryptocurrency. The primary “con” actually arises from cryptocurrency’s anonymous and private nature. For example, it’s far easier to lose cryptocurrency since you don’t have a credit card company or bank performing charge reversals or offering fraud protection. In this regard, cryptocurrency is similar to cash. If your wallet is lost or stolen, there’s no way to recover the cash that was contained within that wallet. The same is largely true of e-wallet apps that are used for BitCoin and other cryptocurrencies. Although it’s worth noting that financial e-wallet apps are more secure than a traditional wallet, so even the most significant “con” surrounding cryptocurrency is manageable.
Blockchain serves as the solid foundation that makes cryptocurrency viable, but BitCoin isn’t alone in its use of blockchain. An increasing number of developers are devising clever uses for blockchain’s technology.
Uses of Blockchain for Developers
Blockchain is appealing to developers for a number of reasons. Peer-to-peer (P2P) mobile networks are generally more desirable than a centralized configuration thanks to the improved reliability and speed. For instance, it’s unlikely that a large number of nodes—distributed throughout the world—would crash at once. Additionally, closer geographical proximity results in a faster connection and better user experience (UX). As a whole, it’s fairly easy and affordable to establish and maintain a P2P system like blockchain. There’s also the topic of blockchain security, which is unsurpassed in many respects. This is not only ideal from a practical and logistical standpoint, but it also helps create greater confidence amongst users.
Here is a look at some apps that have found innovative uses of blockchain:
- Gliph: Gliph is a digital marketplace where users can buy and sell items. All payments are processed using blockchain.
- Storj: Storj offers a blockchain-powered decentralized cloud storage platform that is not only super secure but also quite zippy, with rapid connection speeds arising from the P2P network configuration.
- Fold: Fold used blockchain to create a portal where users can purchase goods and groceries from major retailers such as Target and Whole Foods.
- Chronicled: Chronicled is a document-tracking app that uses blockchain to indelibly record and keep track of revisions, document versions, status updates, locations and other data.
- Golem: Golem is a unique blockchain-centric mining operation where users can contribute computing power to form a hyper-powerful global supercomputer. This supercomputer is then made available to researchers, companies and others who require lots of computing power. Meanwhile, individuals who supply computing power are compensated with cryptocurrency.
- Circle: Circle opened the door to blockchain-based payments on devices equipped with iOS 10. This means that the not-so-distant future will likely bring lots of new Apple-friendly apps that use blockchain technology.
Blockchain’s tamper-evident nature, combined with its ability to track changes without fail, also makes it suitable for supply chain management and other environments where you’re tracking thousands or even millions of “moving parts.” It’s also conceivable that we may see messaging apps emerge with this technology.
Really, the sky is the limit when it comes to uses of blockchain. It could theoretically benefit any system that requires a highly secure, encrypted database platform, with tamper-evident properties that make unauthorized activity—however unlikely—very apparent.
Seeking Blockchain-Friendly App Development?
Blockchain isn’t right for every app, right now, but for those that require state-of-the-art recordkeeping capabilities, encryption, security and reliability, blockchain may be precisely what you need. If you’re ready to leverage blockchain, you’ll need to find a development company that focuses on emerging technology. This is precisely what you’ll get when you turn to the experts at 7T. Our world-class team of developers specializes in many of the newest technologies, including uses of blockchain, predictive analytics, augmented reality, virtual reality, artificial intelligence and natural language processing.
Based in Dallas, 7T maintains regional offices in Austin and Houston. But our clients are situated far beyond Texas’ borders, as we work with companies nationwide. We encourage you to reach out to our team today to discuss your project.