In recent years, the growth of blockchain has been explosive, with more and more businesses getting on the bandwagon. And it doesn’t seem as if its popularity has peaked. It has brought about great technological revolutions, such as cryptocurrency and the NFT trade.
However, despite being associated with the two technologies above, blockchain is something that is capable of so much more. In its truest form, blockchain has applications that help a variety of industries such as banking, entertainment and healthcare, improving their services and processes.
Essentially, its association with crypto, such as Bitcoin, shows that it has the technological potential that could be a driving force behind the digital transformation of businesses looking for something groundbreaking.
But what does blockchain have in store for the software industry? How can software developers and companies leverage blockchain technologies to digitally transform? First, it would be important to understand what blockchain is.
What is Blockchain?
Let’s start with defining blockchain. Released in 1991, it was touted as an innovative way to log and store records of transactions securely and transparently. Blockchain is an open and accessible online ledger that multiple people can access at the same time.
What makes it different from other technologies that offer the same service is that all activity is logged on the blockchain in chronological order. Moreover, no change can be made without the express agreement of all the people involved in the blockchain, and no record, once logged, can be changed.
According to IBM, each record on the blockchain becomes a block of data, with a unique hash identifying it. And it is the interlinked blocks forming a long chain that give blockchain its name. There are several benefits that the blockchain ledger offers.
- The ledger is completely immutable, with records not modifiable once logged onto the ledger
- Highly secure due to its encrypted nature
- Transactions are instantaneous, and it is all done transparently due to the online ledger being updated automatically
- As the blockchain is completely decentralized, there are no middle-man fees to worry about when using it
- Each transaction recorded on the ledger is verifiable and confirmed by all the participants involved, making it one of the most vetted ledgers available.
Industries that Use Blockchain
Understanding the benefits of blockchain allows you to envision how an online ledger like the one blockchain provides can help industries, such as banking, for example. Let’s dive in and take a closer look at how different industries are using the various features of blockchain technology to transform themselves digitally.
Finance and Banking
Blockchain has been helping financial and banking entities secure and improve their transactions, increasing transparency and reducing costs. Many international financial entities are working on blockchain implementations to improve their cross-border transactions and digital contracts and documentation, while others are using API security measures to shore up their data safety. In fact, several banks have shared examples of how they already utilize blockchain, including J.P. Morgan.
Blockchain can help financial institutions reduce their reliance on external intermediaries, as well as allow them to implement an economical and fast system of logging and allowing transactions, such as securities trading and more.
Supply Chain and Logistics
As the blockchain is just an online ledger that protects the cardinality of each transaction made, it is a great option to track items and cargo throughout its journey. In fact, using blockchain for it makes the process more transparent, resolving many of the problems often associated with the manual system of logistics and tracking.
Moreover, this also reduces the chances of fraud, as there would be little to no chance of the cargo being stolen or misplaced without there being a record of exactly where it happened. This helps logistics companies improve their customer trust, and allows them to conform better to national and international regulatory bodies in instances of illegal activities such as smuggling.
Healthcare and Medicine
With data security being a massive concern in the healthcare industry right now, blockchain is a great technology solution here. It not only secures the data but allows it to be accessible wherever and whenever the patient needs it, with complete surety that no modification has been made.
This also allows patients to keep track of their medical records, as well as control who has access to them. Plus, it helps them track and verify the authenticity of their prescription drugs, to see whether they are authentic or counterfeit, curbing the counterfeit drug trade.
Another example of blockchain being used in the medical industry is the MediLedger Network, which utilizes blockchain and cryptography to provide a privacy-first platform for secure healthcare trading partner transactions.
The real estate industry is long overdue for reform and revamp, and blockchain is the driving force behind many of the potential changes that are being implemented by pioneers. One of the biggest problems is having complete transparency when buying or selling a property, which can be simplified and made more effective with the use of blockchain.
Companies can develop an online ledger that logs all transactions and activities performed on the property, which would allow all parties involved to track the veracity of claims, like repairs. Moreover, it would also allow them to track the provenance of the property in question without a lot of effort.
Similarly, there are numerous examples of the effectiveness of blockchain in industries like fine art, and even government, that are lending weight to the claim that blockchain is the technology to be utilizing today.
Over the years, technology has transformed and new trends and norms have emerged. For example, in the earlier days of web development, PHP was considered the king. And it did reign supreme for a long time.
However, with the advent of technologies like .NET and Python, people started to look for PHP alternatives that were easier to learn and develop, or provided a complete development ecosystem. That is how the industry evolved, and that is exactly how blockchain is revolutionizing the software industry today. So, let’s look more closely at its impact.
Five Ways Blockchain is Changing the Software Industry for the Better
According to a 2020 study published by Intelligence CIO, blockchain is a burgeoning field that is going to impact the market for servers, software, IaaS, and tech businesses in general in the coming years. According to them, the value provided by specific segments of the software world will slowly cover entire ecosystems via the extension of their platforms. Therefore, its important to know how blockchain can help the software industry upgrade itself into the next phase of technology.
Let’s look at five of the most effective ways that blockchain can impact the software industry:
The first, and most important benefit of using blockchain in the software industry, is the security it provides. Software security is a major concern for software developers today. Due to its nature of logging all the data and transactions, replicating and sharing it among all participants, blockchain allows us to restrict unauthorized access and changes.
For example, if a hacker gains access to the records of a single participant, and edits it to their advantage, the edited file would be useless, as it won’t match with the other copies on the blockchain. Therefore, even if a couple of records are compromised, it won’t affect the blockchain or its participants.
This is what makes the blockchain so popular for cryptocurrencies, as it protects the trading or sharing of these crypto coins with little chance of fraud.
Make Projects Resilient
Despite its seemingly convoluted and confusing methodology, the blockchain is one of the quickest and most responsive technologies out there in the tech industry. For example, it is said that the Bitcoin network alone has exponentially more computing power than the five hundred supercomputers on this planet combined! That is a massive, mind-boggling figure to behold.
And in this era of quick response times, using technology with such high processing power and security is a no-brainer for a software development firm.
Tracking and Transparency of Critical Transactions
As we mentioned earlier, one of the biggest issues that banks and financial institutions face is that there is a lack of security in their transactions. This limits the number of transactions to the most essential. However, with the blockchain, they have a way of making secure payments through another mode – cryptocurrencies.
There are currently a variety of cryptocurrencies released by entities and individuals across the world, from the market leader Bitcoin to joke coins like Dogecoin. And even if they do not use cryptocurrencies themselves, the software industry can harness its power to provide better tracking, tracing and recording of transactional data to and from the other entity.
This is especially useful when we talk about digital assets like property deeds and other brand assets like NFT logos and more. Using blockchain, you can establish proof of ownership, allowing for more robust provenance tracking.
Improved Financial Solutions
Similarly, blockchain also allows for more and better financial solutions than conventional card or currency ones. For example, many businesses around the world are now also accepting Bitcoin as an acceptable mode of payment.
As a more secure and transparent financial solution, people who use crypto tend to prefer it over conventional payment methods because it allows them freedom from a centralized banking structure.
Better Data Integrity
The importance of data and keeping it secure is something that everyone in the software industry is aware of. In recent years, data has become an undeniable asset, and some malicious users try to exploit shortcomings in many businesses’ software solutions in order to get that data.
However, if the software industry fully adopts blockchain, then that mode of unauthorized access by these hackers would be useless. Any change they make in the existing data would be rendered null and void, making it impossible to copy or manipulate that information.
In short, blockchain offers numerous benefits to many industries, including custom software development. Its transparency and security, as well as its inherent ability to keep the cardinality of the data safe, makes it a technology worth utilizing, especially as data and digital assets are becoming more common and critical to business operations.