Blockchain: Where are we headed?
By Mamata Saha
Blockchain: Introduction and origin
Technology thrives on innovation. Before we even get accustomed to one, the next one comes along! In fact, many of these technologies have been in the making for decades before finally reaching millions worldwide, while we have assumed that they're fairly recent developments. Blockchain is one such technology that has captured our attention, and has been making an impact on many aspects of life and work. But before exploring the various facets of the technology, let’s understand what it is all about.
Mathematicians Stuart Haber and W. Scott Stornetta were aiming to find a method of securing document time stamps so that no one could doctor them. It was at least three decades ago, in 1991, that they created the technology. Surprisingly, the world had to wait till 2009 when the Blockchain technology was applied to Bitcoin, a digital currency, for the very first time. It was required only for the purposes of recording digital payments on a ledger.
Blockchain: What it entails and its importance
According to IBM, “Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” Let us highlight two words here for everyone’s benefit. The first word is immutable, meaning unchangeable or permanent. Essentially, this indicates that once the data is stored, it cannot be edited or deleted. You could say that the purpose of Blockchain is to capture and transmit data but with no scope for alteration. As far as the word assets goes, we mean anything from a house or a car to patents and intellectual property. In other words, you can call it a database storing data electronically but with a difference from a regular database. How?
The data organization format is a key difference between the two. Blockchain collates data in groups or blocks and each block is assigned a storage capacity. Once the block runs out of its storage capacity, it is closed and connected to the previous block, and this continues for other pieces of information. Together, they form a chain of blocks referred to as Blockchain. When you find more data that needs to be put together, you insert it into a fresh block and link it to the previous one. In addition, cryptography is used to enter, validate, and process all transactions.
A question we may want to ask ourselves here is the significance of Blockchain in today’s world, among a host of other technologies mushrooming every day. To function like a well-oiled machine, any business needs relevant data. The data also needs to be error-free and reach you on time. Blockchain will work perfectly here because it will provide you with the information you need right away, besides being detailed and irreversible. What it does is helps keep the data pristine not just because it is incapable of being fiddled with but also because only authorized members have access to the data block. In a word, this ensures that the data people receive is credible.
Blockchain: Purpose of decentralization
Blockchain data is contained in nodes or devices that store and safeguard the data. Anything from servers to laptops to computers can serve as nodes. Let’s consider a simple example. Hypothetically, multiple (thousands) systems are kept in a warehouse and have a database that stores confidential customer account information, owned by a company. If we consider natural or human hazards such as a fire, a power outage, or a loss in connectivity, how might that impact the data stored in these computers? The answer is obvious; everything would be destroyed or compromised.
Is there anything we can do to prevent that from happening? Yes! Blockchain can work its magic in such instances! The technology ensures that the information is distributed across a gamut of nodes spread across a network in varied locations. That way, anyone with malicious intent who messes with the data at a specific node in an attempt to change it, will reach a dead end. Why? Because a data change in one node does not imply a change in the others. So, a fraudster will have to rethink their entire attempt to manipulate the information stored in the node. Therefore, decentralization helps retain the control of data in not one but a group of hands, and guarantees its security.
Blockchain: Applications
NFTs
While most people who are familiar with Blockchain tend to associate it with cryptocurrency, the technology’s use is not confined to it. In fact, there are numerous other areas it can be applied to. Among those that come to mind, the first one is Non-fungible Tokens (NFTs), which show a lot of promise.
Let us take a minute to understand what NFTs are. Since we have briefly touched upon cryptocurrency earlier, you could say that NFTs are another form of digital currency that can be used to buy or sell digital goods bearing a resemblance to products we use every day. For instance, you could use NFTs to purchase paintings or even accessories. Companies that have started using the Metaverse to showcase their products may find this method of payment suitable, quick, and easy. Like Blockchain, it is worthwhile to note that you can use NFTs to buy and sell stuff or even give it away, but you cannot exchange or replace them.
Voting
Blockchain can play a pivotal role in ensuring that the identities of those voting are safeguarded. They might even be able to do away with in-person voting at booths, or sending votes via postal mail. The process will be simpler and faster because all you’ll need to do is use your laptop, cellphone, or computer to vote, using a link to a portal. Irreversibility of the data stored in blocks will ensure that it’s safe and secure, so voter information becomes inaccessible except to a select few.
Health concerns
Likewise, the data stored in patient health records can also be protected using Blockchain technology. Due to the nature of the data, healthcare professionals can access specific patient information and share it with one another for discussion, appropriate diagnosis, and the subsequent course of treatment.
Blockchain: Patent data analysis
With Blockchain being a sought-after technology, we can assume that research has been going on for a while, to find more areas of professional or personal life where it can be implemented. To that end, countries and companies have been putting their best foot forward to create sub-technologies that use Blockchain and get them patented before using them. Let us look at three key graphs related to Blockchain patents and unearth the message they are trying to convey.
Although the line graph in Fig 1 has captured data from 2010 onwards, let’s focus on the data from 2016 to 2021. The period from 2016 to 2018 was rather slack, with a flat line, although it did marginally rise in 2018 and started picking up after 2019, before rising exponentially from 2020. There was a marginal dip for a short period after which there was a steady increase all through 2021 and a peak, before it plummeted in 2022. Since the second quarter of the year has just commenced, there is definitely hope for more Blockchain-related patents to be published by the time the year comes to an end.
Among the top countries that published Blockchain-related patents in the five-year period in Fig 2, there is not much room for debate in terms of the country that gets a significant slice of the pie, i.e., China (67.1%), followed by the US (12.6%) in second place, although the share is rather small in comparison. Asian countries have a presence as well, represented by Taiwan, Japan, Korea, and India, with Korea taking up a sizable share out of the four. Europe has a small share too, with Canada and the UK taking up even tinier portions. Last but not least, WIPO takes up about 5% of the pie.
Finally, Fig 3 gives us a peek into the top global companies that have made substantial progress in owning Blockchain-related technologies in the last five years. Needless to say, with the exception of American companies IBM, Advanced New Technologies, and Mastercard, the remaining companies are all based in China, with Alibaba taking up the lion’s share, followed by Advanced New Technologies and IBM. Let us also add that the UK has a presence here, NChain Holdings Ltd., which has just as many patents as IBM. Let us hope that the rest of 2022 provides other global organizations opportunities to make the most of the Blockchain boom!
Tracking emerging technologies: Relecura
Since our discussion has revolved around an emerging technology, it is ideal to draw your attention to Relecura, a global organization dealing with tools for innovation intelligence. While its tools cover the entire spectrum of the innovation lifecycle, we would like to focus on the TechTracker, a product that tracks competitor technologies, assesses varied technologies, analyzes technology trends, and tracks emerging technologies. If you wish to know more about us, visit https://relecura.com, and browse through our offerings.
Blockchain: Shortcomings
Blockchain has many applications, in addition to cryptocurrency, but it comes at a price. Bitcoin uses a method of consensus called Proof of Work (PoW) that uses computational power of huge proportions, which is a big expense. In addition, authenticating innumerable transactions consumes lots of power, leading to massive electricity bills.
While there are cryptocurrencies that might take less time to verify a transaction, Bitcoin takes 10 minutes, thereby reducing the number of per-second transactions to seven! Finding workable solutions to tackle the speed problem have been in progress for a while. Moreover, there’s also a limit to the amount of data a block can store, so size is a critical concern that needs a foolproof solution if Blockchain has to find more value and use.
Finally, even if we consider the immutable nature of Blockchain technology, it still provides a platform for illicit activities such as purchase and sale of illegal products, known as the dark web. US rules and regulations have mandated financial service providers to run a more stringent criminal background check of their customers while opening an account, to validate their identities, and to keep such activities at bay.
Blockchain: The future
Blockchain technology has found its way into many applications and innovators are attempting to look for more ways we can find use for it. While Bitcoin has been its biggest user, there are a number of other cryptocurrencies like Ethereum and Tether that use the technology as well.
Given that financial transactions for businesses and investors will be safer, authentic, reliable, and involve fewer people, Blockchain is more of a necessity than a luxury. So, it’s only a matter of time before all companies start implementing it. In fact, if you search well, you’ll find companies that have launched or are in the process of launching NFTs for purchase of their products digitally. In conclusion, like AI, the future of Blockchain is looking up!
