The blockchain - a uniquely structured, decentralized, and highly secure database - is often dubbed the future of the internet for the reasons just listed.
The blockchain is structurally very different from traditional databases because it collects groups of data into “blocks”. When the block reaches its storage capacity, it is added to other blocks, chaining all of the data together in what is known as the blockchain. Each block gets added by a node, or computer connected to the blockchain, which carries its own copy of the blockchain. If a discrepancy occurs, all of the copies of the blockchain are compared to each other to identify and correct the mistaken ledger.
Compared with a traditional database, which is made up of tables and cross-indexed for easy filtering, and the magic reveals itself. These databases are run by a centralized company and tend to be run by a person with the title along the lines of "database administrator". This means that data can potentially be changed with little to no oversight or verification.
On the blockchain, past data can’t be altered - so as long it’s entered correctly the first time - it can be trusted. So what makes blocks more trustworthy than tables? Well, each computer that is maintaining a copy of the ledger must get chosen to add a block to the blockchain, which in turn must be verified by all of the other nodes before getting added.
Other nodes see the proposed transaction and must verify that the block is being correctly added before it gets placed on their copy of the blockchain, thus someone would have to hack 51% of the nodes in order to override the consensus and successfully approve an illegitimate transaction.
Because the blockchain is a particular kind of database, the applications of the technology are widespread.
The most talked-about applications have to be in the decentralized finance or "Defi" space. The blockchain ledger’s first real use case came with Bitcoin, which created a digital currency. This can be used for buying and selling goods, or sending money to others across the world. By using the blockchain, companies like Santander are bypassing rules that govern cross-border transactions of fiat currencies and reducing transaction costs, while ensuring safe transactions for their users.
Other applications in the realm of finance include market exchanges, auditing, money laundering protection, and insurance.
In respect to business needs, supply chain management is a huge potential use case. A Harvard Business Review article claims blockchain could improve supply chain efficiency by “enabling faster and more cost-efficient delivery of products, enhancing products’ traceability, improving coordination between partners, and aiding access to financing.” A visual representation of the difference between conventional record-keeping and blockchain record keeping can be found here.
Healthcare is another potential business application of the blockchain. Proponents argue that it can help boost the security of the highly confidential and sensitive information held by corporations while giving entities easier access to that information.
Blockchain technology proponents also believe it could help in Real Estate, expediting sales, reducing fraud, and offering greater transparency throughout the home buying process.
Media companies such as MGM, are using blockchain technologies for everything from “global streaming to web, mobile, and TV everywhere audiences of 'certain properties', encompassing transcoding, multi-format encryption and DRM, access control and audience reporting.”
In addition to business applications, the government can benefit from the technology as well. This can include things such as record management, voting, identity management, and taxes, among other things.
