If you say ‘Blockchain’, most people who have heard the term before will immediately think of cryptocurrencies such as Bitcoin, Ethereum or Ripple. And while it’s true that Blockchain technology was built with crypto in mind, its applications stretch far beyond finance.
Back to basics
If you already know what blockchain is, you can skip this paragraph. If you’re not sure: Blockchain is a distributed ledger that is encrypted and immutable. Each new block that is added to the chain needs to be verified by the previous block with a unique identifier. Blockchains are cloud-hosted (hence the term ‘distributed’).
So, while this is obviously useful for transactions and has traditional finance institutes scrambling because Blockchain can cut the middle man, Blockchain’s native safety features make it a great choice for what’s known as ‘the single source of truth’ as well.
Garbage in, garbage out
A big problem in making decisions based on loads of data is that multiple sources may contradict each other. For instance, if the data from your ERP system doesn’t match the data from your warehouse, you have a problem. The reason why these issues arise in the first place is usually because IT infrastructures were built up over time and in response to ad hoc needs.
This leads to a problem known as ‘garbage in, garbage out’. How can you make good decisions if the rot comes from the core? Blockchain technology can help out here in various ways.
Each new element of the Blockchain refers to its previous elements – think of it as a word game where you need to add a word to a list and repeat the entire preceding libmpvlst first to pass to the next round. This keeps everything in check and allows no false information to muddy the waters.
In addition, this is very useful for ID checks and contract signatures. There is no reneging on done deals, no gray area. No one can tamper with the Blockchain, so it’s an airtight way of maintaining business and transaction records. The best thing is, this cuts the need for middle-men such as brokers or lawyers.
The real deal
Another ‘truth source’ where Blockchain can help is in counterfeiting. If products roll off the assembly line and get assigned a verifiable ID in a Blockchain, this is impossible to fake for a counterfeiting operation.
This is also interesting for serial numbers in software licenses and contracts, to ensure customers get the real deal and to keep pirates at bay. Blockchain is scary for all sorts of intermediary operations, but the biggest at-risk population are scam artists and criminals, to whom the ‘true’ nature of Blockchain is antithetical to their business models.
Blockchain of Things
The Internet of Things (IoT) has seen a steady rise over the last years. IoT comprises all appliances, tools and devices that send and collect data over the Internet, and while useful to many users, there have been persistent security concerns.
Blockchain technology can not only provide verifiable streams of data from your IoT devices, but its encrypted nature can also ensure better protection from malicious actors – not unimportant for companies, given the prevalence of cyber-attacks modern companies face. This way, you can kill two birds with one stone.
Notes of warning
Blockchain technology isn’t perfect. Notably, even its founder(s) have admitted that if over 50% of data sources begin feeding the Blockchain false information, that falsehood will be accepted as truth. However, the bigger your Blockchain becomes, the harder this is to pull off.
Another issue is that Blockchains can be power-consuming. It’s not because Blockchains are hosted in distributed ways, that they don’t require computing power. This is especially an issue for the big cryptocurrency platforms, whose growth has been meteoric. For a smaller outfit like one medium-sized business, this shouldn’t be much of an issue.
As you can see, investing in setting up Blockchain technology can bring your business numerous benefits that go beyond cryptos. It’s not an easy area to master, but that is why we exist. Are you curious or do you just want to have a chat with us to discuss the possibilities for Blockchain to help you with data management? Drop us a line and we’ll get back at you as soon as we can!