More than just bitcoin: 3 ideas for blockchain
The principles on which blockchain is based have the potential to incur great change.
The great upheavals of digital transformation do not happen on their own, but are largely based on new technologies. Artificial intelligence is certainly one of the biggest drivers, but the Internet of Things or 5G also have enormous potential for change. And then there is blockchain, a technology about which we continually hear amazing, but which many people still can’t really understand. The most popular application of this new technology, the cryptocurrency bitcoin, is probably also to blame for this. It is very complex and therefore hardly suitable as an example for explaining the technology. Blockchain itself is very versatile and can be used to solve many existing problems.
What is blockchain?
To put it simply, blockchain is a distributed database that chains data together in encrypted blocks.
This sounds very unspectacular at first, but on closer inspection the advantages quickly become apparent. Blockchain is secure because it is not located on a central server, but all participants in a blockchain have a full version. It is also tamper-proof, because each blockchain contains a checksum for the entire chain and for each new block. In addition to this, the data is stored in encrypted form so that only the participants who know the key can read and expand it.
These attributes make blockchain particularly interesting for applications where security, trust and credibility are important. This includes transactions in the financial sector or when concluding contracts. Blockchain technology can take on the function of banks and notaries here. Processes that previously required an intermediary can therefore be completely digitalized. However, this technology offers many other exciting opportunities.
Blockchain as a digital administrator in the value chain
The problem: the programmatic media business has expanded into a very long value chain that is intransparent, susceptible to fraud and ineffective. A huge black box has evolved between advertisers and publishers, which swallows up large portions of the budget without the result being exactly traceable.
The blockchain solution: a value chain based on blockchain would immediately make programmatic advertising transparent. Each little step from the request to the ad display could be traced. Ad fraud and brand safety would no longer be problematic either, because the perpetrators could be tracked down at any time.
Blockchain as a supply chain
The problem: when dozens of people became ill in the USA in spring 2018 because they had eaten Romaine lettuce contaminated with E. coli, the supermarket chain Walmart responded by stopping sales and destroying all the Romaine lettuce in its almost 12,000 stores. However, this did not eliminate the cause. By the summer, the number of those infected had risen to 197 and five people had died.
The blockchain solution: Walmart also responded with technology by introducing a new tracking process that the company had already been working on with IBM for two years. Using a blockchain, foods such as vegetables can now be traced back via all intermediaries to the producer and even to the field on which it was grown. In the future, contamination can be eliminated according to the source and Walmart will only have to destroy the affected batches.
Blockchain as a money distributor
The problem: public transportation in Germany has been highly fragmented since rail transport was opened up to private companies. Traveling by train today often involves several companies, for which passengers often purchase a joint ticket. This is convenient for the customers, but causes a lot of billing and administration work for the providers, because the respective shares of the travel costs have to be calculated, estimated and, in some cases, distributed manually.
The blockchain solution: a blockchain platform could precisely determine the shares of the participating providers and automatically distribute the revenues.
The bottom line:
Blockchain was originally developed for the digital currency bitcoin, but the technology also offers a high added value for entirely different areas of application. It is therefore no wonder that the global blockchain market is set to explode from 411 million US dollars in 2017 to 7.7 billion US dollars in 2020. Despite all the euphoria, it is important to remember that blockchain not only solves problems, but also has problems itself. It is considered complicated and, as the length and number of participants increase, it can become sluggish. The blockchain technology is therefore in urgent need of further development.