Blockchain technology is one of the most fascinating advancements in recent history. Blockchain applications have been heralded as a way to revolutionize everything, from the way we exchange currency and vote, to how we buy a car and secure sensitive data across borders.
- But what exactly is blockchain?
- How will it affect our day-to-day lives?
- What are some blockchain applications that we can expect to see in the near future?
- What are some of the barriers to blockchain adoption, and how can blockchain be applied today?
Let’s explore these questions in detail below and determine when mass adoption of blockchain applications could happen.
What is Blockchain Technology?
Blockchain is a way of creating an immutable, decentralized ledger that records all transactions. It does this through a network of nodes — high-powered machines used to process and verify large quantities of data — as well as miners, the individuals or entities that run the mining operation and earn an incentive for lending their processing power.
A blockchain can only be altered by consensus among the participants in the network, meaning it cannot be compromised or corrupted by outside influences because no single entity has control over it.
Blockchain networks offer benefits over traditional databases such as:
Decentralization is one of blockchain’s most impactful features. The centralized nature of traditional databases means that a single point of failure leaves the entire network vulnerable to attack or manipulation by malicious actors. On the other hand, blockchain networks are decentralized across thousands and even millions of computers around the world, with no particular computer holding power over any other node in the system.
Blockchain networks provide transparency to transactions. Traditional databases have a hierarchical structure, which means that data is stored in silos and cannot be accessed by other users without special permissions. The blockchain network protocol has no such hierarchy; nodes can access the ledger of every transaction on the blockchain using their private keys to verify each operation they perform.
Immutability is the blockchain’s ability to securely store data in a shared, decentralized public database. It can be considered as one of blockchain’s most valuable features because it guarantees that records cannot be tampered with or modified and are always available for viewing by anyone on the network at any time.
The blockchain protocol is designed to be inherently secure. Data on the blockchain cannot be corrupted or tampered with because blocks in a blockchain are linked together and secured by cryptography which can only be accessed through an encrypted private key.
Blockchains also provide security against hacking attacks, as each of these distributed databases would have to undergo significant computational power for any tampering to occur.
Practical Use Cases for Blockchain
Many blockchain applications are already being used today for various purposes, including in finance with Bitcoin and Ethereum’s smart contracts, digital identity verification, the automotive industry, supply chain management, the internet of things (IoT), and more.
A few of these applications include:
Walmart's food traceability program
The ability to have fresh produce from around the world year-round is a veritable marvel of modern life. But it’s not without its downsides. Preventing the spread of food-borne illnesses, for example, depends on a vendor’s ability to pull contaminated items from the shelves quickly.
But when the vendor is operating on the massive scale of a company like Walmart, tracing the provenance of a single product can be something of a challenge.
Thanks to blockchain technology, however, Walmart can now more efficiently trace produce, meat, poultry, dairy, and multi-ingredient products like baby food and salad mixes using a system powered by Hyperledger Fabric.
Automotive Record Keeping
At Carnomaly, we’ve made it our mission to bridge the gap between the automotive industry and blockchain technology. One of the many ways we’re going about this is to put the control of a vehicle’s history into the hands of the owner. Through CarrChain, our app-based system that records vehicle maintenance, incidents, and other happenings throughout the lifespan of a car to the blockchain, participants are rewarded for taking care of their car.
The forthcoming CarrChain app provides a user-friendly interface that empowers vehicle owners to avoid overpriced vehicles, get the most for their used car when it comes time to sell, and feel confident that they are getting a comprehensive look at a vehicle’s history.
As it turns out, the automotive industry might just be the ideal use case for an everyday application of blockchain technology.
Blockchain has been explored as an alternative method for storing medical records for greater privacy and interoperability of data among providers, reduced costs, and improved patient outcomes through better coordination. Two examples of this blockchain application include MIT Media Lab’s MedRec project or Hashed Health with their permission-based blockchain platform Patientory.
Will blockchain applications achieve mass adoption?
With so many current and potential use cases for blockchain technology, the question of whether mass adoption of this technology will happen in the foreseeable future is front of mind for many.
It’s important to remember that blockchain is still in its infancy. The theory behind blockchain was first outlined by a person or group of people using the pseudonym Satoshi Nakamoto in 2008, and later implemented in 2009 as a core component of bitcoin. It hasn’t really had time to grow up yet.
The technology certainly has the potential for mass adoption. Still, several barriers will need to be addressed before blockchain can achieve widespread use.
These barriers include:
Scalability is a major issue that blockchain technology needs to overcome before it can go mainstream. Blockchain architecture requires every node in the blockchain network to store and process every transaction, which makes storage of data inefficient as well as increasing overall processing times – for example, Bitcoin transactions may take an hour or longer before they are fully verified.
In order to remedy this problem, blockchain developers must find a way to scale up without compromising the integrity of the underlying blockchain system.
One solution would be an off-chain system where one blockchain manages ownership while other systems handle processing large volumes of data quickly. This type of scaling will allow blockchain technology to grow with no consideration for block sizes or time intervals between new blocks created by miners.
Some hiccups still need to be worked out, such as using smart contracts, which could potentially have malicious code within them if not properly programmed before they are deployed.
Blockchain Interoperability is a term representing blockchain technologies’ ability to interact with each other as well as their ability to communicate and share data. This interoperability will be essential for mass adoption because it will allow developers of blockchain solutions in different industries, such as healthcare, supply chain management, or financial services, to leverage pre-existing trust mechanisms across ecosystems.
The blockchain community has been working on various ways of analyzing the problem, though they’ve yet to reach a consensus.
One proposal suggests that private blockchains should not try to do everything themselves; instead, they can connect through an “Interledger,” which allows them all to work together seamlessly while still retaining privacy protection capabilities.
Other aspects — like creating smart contracts — need additional research before the issue of interoperability can be truly solved.
Blockchain’s security protocols mean transactions often take time — anywhere from three seconds to several hours and up. While it may not seem like a lot, it certainly doesn’t meet mainstream consumer’s expectations of instantaneous transactions.
Blockchain networks have an enormous carbon footprint which may not be sustainable in the long term as energy sources continue to deplete. In order for blockchain technology to achieve mass adoption, there needs to be commitments from governments around the world on how they plan on reducing their carbon footprints, so blockchains become more environmentally friendly.
Achieving consensus truly is what makes a blockchain so useful, and the typical method of getting all participants on the same page via expensive mining computers is known as Proof of Work. Recently it’s come under fire — and caused Tesla to give Bitcoin the (temporary) boot — for its significant carbon footprint thanks to the massive quantities of machines that need to run around the clock to process and verify data.
One potential solution is the use of a consensus mechanism called Proof of Stake, which requires significantly less computational power and, therefore, a drastic reduction in carbon footprint. The Ethereum network is expected to begin using this consensus process sometime between 2021-22.
When will blockchain applications go mainstream?
Blockchain is becoming a bigger part of the conversation every day, especially as the use of cryptocurrency moves from the darker corners of the internet into widely accepted applications like Venmo, Robinhood, CashApp, and onto other mainstream stages.
However, it still faces significant hurdles on its path towards true mass adoption.
For now, the blockchain may still represent an emerging field outside academia and industry circles, but it shows promise for becoming a disruptive force in the lives of day-to-day consumers. Many innovative, forward-thinking companies have already begun exploring ways they could utilize blockchain tech within their organization.
It’s safe to say that mass adoption of blockchain applications will eventually be a reality; it just might not happen all at once.