By Dr. Prabhu Aggarwal, Dean, Badruka School of Management
Recently no other technology is defining to grab the attention of public and industries as much as blockchain. The concept of blockchain transformed into a universal tool in a blink of an eye. However, one ought to affirm whether blockchain is revolutionary or merely hyped.
Unraveling blockchain technology
Blockchain is an advanced shared-data-structure that can hold records of digital transactions and is distributed across many computers on the peer-to-peer network. In contrast to other approaches to organising centralised systems in which a single subject owns the ledger,
blockchain consists of multiple connected computers – the nodes. Transactions are grouped into blocks in a chain where each block has its timestamp and is secured by a digital signature connected to the previous block.
Separating hype from reality
It is now important to distinguish between the capabilities that are real and those are merely imagined. However, after great expectations for blockchain, its widespread use has not been as fast as many people expected. Skeptics however have complained that most of the hype is the result of misconception as well as unrealistic expectations. But this is where, one can see that tangible steps are being taken towards its evolution in different spheres of business. The extent of the global blockchain technology market was USD 4. The reduction in carbon emissions is expected to be realised progressively from 2023 to 2030 by 2 percent.
Diverse applications of blockchain
Currently, there are 50,000+ active projects in the field of blockchain and DLT and this number will be in constant increase. The above are some projects which show that blockchain can be applied across the different industries to transform traditional systems.
Finance and banking revolution
The financial sector was one of the first industries that embraced the blockchain technology. On the sectors like cross-border payments, smart contracts and decentralised finance (DeFi), blockchain is revolutionising the traditional banking. Specifically, it has been summarised that major financial institutions are currently using this technology in a bid to either cut down the time taken to complete a certain task or even eliminate that task all together, sometimes even out rightly reducing the costs. One of the most noted recent disruptions is DeFi which provides a set of financial services cutting out intermediary parties thus making services more effective and cheaper.
Enhancing supply chain management
Blockchain presents suitability in supply chain operations due to its capability of creating anticorruption, tamper-proof transaction database. Being able to know the flow of products from the manufacturers to the end users, blockchain enhances the recording of
events. Currently, most large organisations have adopted this technology to confirm the identity of items and accessed origination.
Advancing healthcare solutions
In healthcare, blockchain reflects on the problems like patient data management, integration and drug supply chain. Thus, the idea of implementing patient records into the digital database on the blockchain will enable the healthcare providers to simplify the
records access and ensure privacy and highest level of security. The technology also helps in tracking pharma products eliminating the possibility of fake drugs getting to the market.
Real estate transactions entering a new era
The real estate commerce and the conveyancers can benefit from blockchain because it has the potential to bring about the digitisation of the property record and the subsequent transaction. These platforms facilitate smart contracts which make property transfers faster, efficient and effective as intermediaries’ services are not required to be paid. In addition, the use of property registries implemented on the blockchain reduces the incidence of fraud. Blockchain has already completed several real estate’s sales, which indicates that there is a bright future.
Opening up And updating administration
Governments of different countries are using blockchain for identity, voting and other public service. Due to these characteristics, there is a possibility to fight corruption, conduct fair elections and optimise the existed administrative procedures. Several countries introduced pilot projects based on the blockchain in the sphere of voting to increase the reliability of the election and the level of these people’s trust.
Addressing challenges and limitations
Some of the factors that are making it difficult for everyone to adopt renewable energy include scalability of renewable energy sources, interoperability of the two systems, regulatory aspects, and energy utilisation are some of the challenges that are bounding the implementation of renewable energies. For instance, the Bitcoin blockchain’s consensus mechanism known as the proof-of-work requires massive energy consumption which its usage surpasses some nations. Attempts are being made to make new more efficient consensus algorithms like the proof-of- stake to solve this problem.
However, this may slow the proper adoption of blockchain by organisations because of its complicated nature of technology. Additionally, lack of clear guidelines is a major issue, which stems from the fact that governments around the world have not yet figured out which regulatory models are suitable for managing the application of blockchain solutions.
Embracing the potential
Harmonising to the turning points identified and analysed above, it can be stated that blockchain engineering has not yet proven all the questionable anticipations in every sphere, but the efficiency of the transforming consequences in the industries is out of hesitation. When solving the issues of trust, security, and efficiency, blockchain can bring disruptive changes to classical systems and open new horizons for development. It is suggested that as organisations push forward to understand and adopt blockchain, one must do so with a clear vision and a realistic perspective of what the technology is and what it is not. Blockchain does not only indicate a revolution in technology but also a revolution in thinking and perceiving different areas of life from a new perspective of trust and transparency.