Blockchain Unleashed: Transforming Industries Beyond Cryptocurrency

Blockchain technology and particularly distributed ledger technology have been associated with cryptocurrency for long. With the publication of the Bitcoin white paper and the subsequent implementation of Bitcoin, the lay non-technical audience often perceives that blockchain and cryptocurrency are synonyms. There is a lot more to blockchain than cryptocurrency and there is no reason to think that these related concepts are interchangeable.

At a fundamental level, blockchain is an implementation of distributed ledger technology. It is a decentralized ledger or data store which has a growing and immutable list of records, called blocks. The blocks are linked and secured using cryptography. Since each block contains the cryptographic hash of the previous block including a time stamp and transaction data, the possibility of modification or change of that individual block does not exist.

The blockchain is formed by a network of computers (that is, a distributed network) called nodes which collaborate to validate and record transactions. Any new transaction that is created is broadcast to the network and is verified by multiple nodes (this implementation is specific to various kinds of blockchain). Upon confirmation of the transaction it is added to a block and broadcast again to the network.

The attributes of immutability, security and transparency make blockchain implementations well suited to a wide range of use cases. These include ones where the participating entities in data transactions might not have any reason to “trust” one another but can still engage and complete a transaction because of the “trustworthiness” exhibited by the underlying blockchain which pins the transaction for audit and view by all having rights to do so. 

Essentially, the blockchain is able to eliminate the need for third parties to broker trust and instead provides a technology-centric approach that reduces inefficiencies and optimises operational advantage for the participants.

Today, blockchains are widely used to create digital identifiers which power digital trust ecosystems in the domains of workplace credentials, skill and knowledge opportunities, livelihood and employment sectors, electronic commerce, digital health and medical records, supply chain, track and trace systems, asset and inventory management systems, payroll and HR workflows and more.

All these examples of blockchain technology do not require the implementation of a cryptocurrency based system. Instead, what the blockchain provides is an utility (similar to various public or private utilities we are familiar with) which can be used by application and service developers to design workflows which integrate with the APIs provided by the blockchain and enable the CRUD (Create, Read, Update, Delete) actions which are integral to any transaction.

One of the defining features of cryptocurrencies is that it uses a public ledger system to record the transactions. This ledger system is often an implementation of blockchain technology since cryptocurrencies are digital assets which use cryptography to secure transactions and create control of new units. By design cryptocurrencies operate independently of any centralised

authority and thus are managed by a decentralised network of computers which validate transactions and maintain the integrity of the system.

Cryptocurrencies are thus a very specific implementation of blockchain technology. And thus they bring about different requirements in terms of accessibility, governance and risk management.

Blockchains are an important element of digital transformation which is led by digitalisation. The technology offers new design patterns of enabling the use of persistent digital identifiers which provide the holder (or recipient) of those identifiers with an increased granularity around control of personal data.

Thus, these approaches are ideally suited for data governance requirements which emphasise on selective sharing of information through consent-driven mechanisms.

Large systems at nation-scale which are built around blockchain technology offer the capabilities of agency and autonomy which are otherwise absent in more legacy designs. Real world business use cases are implementations of “network of networks” principle - that is, number of ecosystems exchange and share data in order to accomplish complex workflows.

The veracity and authenticity of such data streams are assured when blockchain implementation is present. Blockchains as a foundational infrastructure is needed to make the switch from high-cost, low-assurance data systems to low-cost, high-assurance ones. 

And in the coming months we are going to see a growing number of pilot and production-class deployments which establish the value available through the adoption of this technology.

By Yalo Thomas, Director of Pre-Sales, Dhiway Networks