Alec Ross in The Industries of the Future states that blockchain will be to banking, law, and accountancy as what invention of the Internet was to media, commerce, and advertising. Blockchain is expected to lower costs of transactions, disintermediate multiple layers of business activities, and reduce waiting time. In one of the TED Talks Bettina Warburg explains how blockchain is to transform economy through it decentralization, leading to a change of roles of traditional institutions such as governments, banks and many others.
In a very simplified way, blockchain can be explained as a digital file set for recording transactions between parties which collectively have agreed to adhere to protocols of communication and validation of the data stored in the file. The word block in the blockchain would stand for container data structure and chain would imply multiplicity of the blocks. Key enabler of blockchain technology is Internet and peer-to-peer networks, which are prerequisite for Internet users to exchange any files.
Data stored in blockchain due to adhered protocols is resistant to modifications once it is recorded. One of security mechanisms in blockchain are called time stamps, which refer to possibility to record transactions in the blocks only for defined period of time and no possibility of altering transactions after.
Hence it’s believed that blockchain increases trustworthiness of transactions between those who interact through blockchain and further authentication of transactions by higher instances such as governments or banks is no longer needed. As a result of this digitally-increased trust, parties agree to eliminate reconciliation processes and reconciliation institutions, such as external, formal, or higher instances. If you are still feeling fuzzy about blockchain basics, you can find a step-by-step explanation of blockchain phenomenon, enriched with infographics, in short post by Mohit Mamoria available in this place.
In the light of theory of technology innovation blockchain is still a technology that emerges from other technologies competing for serving the same purposes. Such state is called standard battles and design dominance battles. Dominant designs once established set up stable architecture for technology development and encourage companies to use it, what spurs its prevalence and related global adoption.
Examples of dominant deign battles from the past included e.g. Video Home System (VHS) vs Betamax, or Blue-ray vs High-Definition Video. Once you realize that this is actual status of blockchain technology as a standard in adoption stage competing with many other standards, you’ll easily understand why discussions around blockchain are so dynamic and vivid in events, such as e.g. recent set-up of Blockchain Partnership by 23 European countries (joined by 2 other countries later), or creation of European Union Blockchain Observatory with significant budget planned to spend for technology development.
As blockchain belongs to so-called general-purpose technologies, what means its final application have not been exhaustively discovered yet, it can enable a new way of working in multiple domains. Currently discussed domains include monetary exchange, energy and health management, legal contracting, supply chains transparency, and also governmental activities such as voting, handling birth certificates, or property records. As emerging and not finally regulated technology in design dominance battles, blockchain actively competes with cloud technology and other technologies from pre-cloud era enhanced by interoperability solutions.
In The Business Blockchain Promise, Practice, and Application of the Next Internet Technology William Mougayar pointed out that proof-of-concept for development of blockchain technology, also in other domains, was electronic cash, which was able to survive & participate in economic exchange outside formal & regulated financial institutions, such as banks. After proof-of-concept relating to cash other virtual currencies serving value transfer emerged, which enable to buy and sell goods, they are subject to economic exchange, and are listed at dedicated technology stock exchanges.
Applications of blockchain don’t limit to electronic cash and financial services. For energy market blockchain offered instant metering solutions for local energy generation that allow communities to buy and sell renewable energy. Blockchain is also discussed in electricity grid optimization context, and some companies apply combination of blockchain and so called smart plugs to allow electricity users to purchase energy in the real time and change suppliers if energy prices they agreed to pay diverge.
In healthcare domain blockchain offers health care and medical record solutions, such as the possibility of saving medical records (traditionally stored in paper form) on a secure and convenient digital file, which are being developed are portable and safe, and offer clinicians up-to-date patients files available everywhere any time with patient’s permission. One of large-scale implementation of blockchain in healthcare takes place in Estonia, where health records have form of distributed files, which can be opened with Estonians digital ID Cards.
Storing health records in blockchain might foster interactions of patient with multiple healthcare delivery institutions, research on aggregated patient’s data by scholars, reduction of frauds toward national healthcare payers and healthcare insurance institutions as all clinicians visits and medical procedures within blockchain based healthcare record would leave the time stamps, explained in earlier part of this post. Blochchain-based solutions in healthcare also cover enterprise medical imaging or genomics.
Additional dimensions of blockchain for healthcare are elaborated in Who Will Build the Health-Care Blockchain by Mike Orcutt, or Potential for Blockchain to Transform Electronic Health Records by John D. Halamka, Andrew Lippman and Ariel Erkblaw. Start-ups and entrepreneurs developing blockchain technology in European Union might be interested in start-up accelerators located in France, Italy, or Poland; and also World Blockchain Forum dedicated to this technology planned in London between 5th-9th of September 2018.