In April 2019, nearly 50 conferences devoted to blockchain technology were planned around the world, meaning a massive amount of organizational effort, involving lots of people and even more money. But does such hype around just one of many information technologies mean that it is widely understood? There are still plenty of myths and insinuations, as well as a build-up of emotions based on the spectacular increases and decreases in the value of bitcoin. But what really is blockchain, the technology that so many are talking about, and so few really understand?

During The Future Blockchain Summit in Dubai, which I currently have the opportunity to participate in, attention is focused on specifics. The organizers undoubtedly aim to show that blockchain is a serious technology, not another speculative bubble like the famous dot-com boom or the real estate market of 2008. So they present hard facts and, above all, companies that already use this technology for their products and services.

But let’s start at the beginning, in other words, explaining what blockchain is – and what it is not. According to the simplest definition, it is a data structure in which data is arranged in blocks. Each such block is an information carrier. The exchange of information brings about the addition of another block directly referring to the block that appears in front of it – this is how a chain of blocks is created, hence the name blockchain. The information is not “overwritten” or changed, which means that the chains contain all previous versions of given information. In addition, many identical copies of each of these data blocks are stored by a network of blockchain users. Such decentralization makes it impossible to falsifyinformation because each copy is crosschecked for compatibility with other versions. And this is what makes this technology so extraordinary – it allows users to send information securely, removing the possibility of falsification.

Despite the fact that the media often writes about the unlimited possibilities of this technology, in reality blockchain has three basic applications:

  • Data notarization – block chains perform the function of decentralized “notaries”, meaning that they store the origin of the data, confirming its compatibility and ownership rights.
  • Smart contacts – thanks to the possibility of saving specific rules in blocks, smart contacts can automate the execution of business logic to exchange data, values and enforce policies.
  • Value exchange (cryptocurrencies) – transactions take place directly in peer-to-peer mode between the parties, saving time and costs connected with intermediaries, as well as eliminating data asymmetry and the need for reconciliation.

Blockchain is a technology like any other – so it has strengths and weaknesses, as well as areas of application which it works best in. Both its potential applications, as well as those which have already been implemented, are highly impressive – and here lies the secret of its popularity. The Future Blockchain Summit, despite its name, proves that the blockchain revolution is closer than it may seem to many of us.

Here are some examples of blockchain used in practice:

Blockchain-based energy management system (Voltex)

Voltex is a Swiss producer of energy management systems based on blockchain technology and smart contracts. The system not only enables producers (and also households, e.g. thanks to home solar panels) to trade in energy by using smart contracts, but also facilitates the analysis of one’s own production and consumption data, potential profit on sales, etc. It also allows users to optimize consumption, and thus energy costs, which is especially important in the case of energy production from renewable sources that often depend on particular environmental conditions (e.g. insolation or wind speed).

P2P transaction system

The widespread use of electronic payments is making cash increasingly obsolete. On one hand, it means convenience, but on the other it means dependence on intermediaries, such as payment card operators, online transaction systems, as well as banks. This leads to higher operational costs, which in some situations may even be higher than the cash value of these transactions themselves. Currently at the summit, HumanpayX is offering a solution which enables direct transactions between the buyer and the seller using a mobile phone and barcode reader or QR Codes. The system uses blockchain, of course, allowing payments in all available cryptocurrencies and thus eliminating intermediaries and the associated costs.

Blockchain in IoT

Despite the growing popularity of IoT and smart home devices, it turns out that users are increasingly mistrustful of such solutions. Manufacturers have observed that more and more smart devices are not connected to the network, and thus not really using their most important IoT functionalities. The reason is the fear of data insecurity, loss of privacy, as well as the blossoming trade in data which the producers are using to enrich themselves, not the users who provide their own data. That’s why Bloomyt has created a system that is not only supposed to secure data sent as part of the integration of devices in IoT, but also give users the right to trade their own data (using blockchain, obviously). On one hand, it allows users to reclaim control over their own privacy, but also encourages them to share their data (and earn off it). On the other hand, companies gain access to data from their devices – which, thanks to the platform, should be disconnected from the network much less often – as well as greater user involvement.

These are, of course, merely a few examples of companies that use blockchain technology as the basis of their business model. But such successful projects allow the popularizers of this technology to break through the hype and reach consumers with specific proposals that can help them in their daily lives.

Author
Anna Nowicka

Started career at JCommerce in 2015 where she is responsible for international sales, focusing on Nordic countries and Benelux. She has long experience connected with HR area in advising companies on recruitment processes, business process outsourcing and temporary employment services. Graduate of University of Economics in Katowice, and Business Language College in Silesian University.


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