What are we Missing out on Blockchain?

Most people today are familiar with the term Blockchain regardless of their professional background, and they may have never used it in their life as much as they have used a prevalent internet technology like HTTP or HTML, and the reason behind that is simply the cyclic rise of Bitcoin price. It remains a mind-blowing fact that there is a currency that dwarfed the US dollar and all other major currencies in less than a decade and it's now fluctuating above $40,000.

How can two parties transfer money over the internet without higher authority, a bank or a Central Bank? Where is the record of the transactions kept? How are the records protected from tampering? These are the kind of questions that are asked diligently by many people whenever bitcoin make the news in a genuine attempt to get bitcoin into their heads, hoping they are not missing out on a big opportunity, and the answer to all these questions is one thing, Blockchain.

Although renowned as the technology that made a digital currency possible, Blockchain, However, has a vast range of applications outside financial technologies and has a great potential to shape many industries in the future same as it's shaping the financial services currently.

In this article, we will talk about what can blockchain introduce to other non-financial industries and why we can't afford to miss out on it.

Let's start by dissecting blockchain and see the underlying technologies that make it works, here are the major technical disciplines we'll find :

1. Computer Networking: the ability of computers to connect and transmit information
2. Cryptography: securing the information so only the intended recipient or the owner of the information can access it and read it.
3. Distributed Computing: the ability of a group of connected computers to work together to complete a task or reach a consensus on the validity of certain information.

Simply put, Blockchain utilizes all these technologies to create a ledger (a table or database), here is how it works:

1. The ledger is distributed among a group of connected computers (servers or nodes) each keeping an identical copy of it.
2. The records are stored by a cryptographic algorithm.
3. With any attempt to add a new record (or Block) to the ledger, network nodes communicate to reach an agreement (consensus) on its validity (tamper-proof).
4. As soon as every node in the network updates its copy of the ledger with the new record it becomes a Digital Asset.

The good news is that the records we store in the ledger can be anything of value, issuance of a token, stocks, identification, certificate, or even medical records. That opens the door to numerous possibilities to turn everything of value into a digital asset.

Worth mentioning that Blockchain is named after the structure of the stored information, where the block is the constituting unit. Not necessarily all ledgers consist of Blocks, hence, the broader term that blockchain belongs to is Distributed Ledger Technology (DLT).

One more term usually used with Blockchain is Smart Contracts. Smart Contracts are special computer programs that run on the blockchain network to ensure enforcement and compliance with business-specific rules related to the record we store in the ledger.

What Blockchain could be useful for when applied to other non-financials industries?

The advent of Blockchain or DLT has introduced new principles and values to the use of the internet:

1. Trust: a tamper poof ledger established trust and eliminated the need for intermediaries, whether it's a central authority or a middleman.
2. Transparency: The shared ledger is available for the transacting parties over the network to review its content and validate it.
3. Privacy, the content of the ledger doesn't store information that leads to the identification of the parties involved in the transaction.
4. Ownership, the network participants own their data and have control over its use.

It's important to note that the application and the use of blockchain will differ from one industry to another, each to serve a particular purpose, and not all the values and principles are necessarily the same in every new blockchain case.

For instance:- In some cases, there is a consortium of pre-selected authorities (companies or organizations) that validates every new record on the ledger, these are called Private or Permissioned Blockchain, so we have not completely removed the central authority, however, the principle of trust is accomplished by the consensus reached by the consortium every time a new record is added.

The biggest potential Blockchain has today resides in introducing these values and principles into the industries that are lacking them. By replacing paper-based or computerized ledgers with distributed ledgers we could transform the delivery of public and private services and enhance productivity through trust, transparency, and data protection.

The biggest potential Blockchain has today resides in introducing the value of trust, transparency, privacy and ownership into the industries that are lacking them.

A Blockchain use case example

Let's take an example so we can absorb all these concepts and terms together.

Let's assume there is a Blockchain network for renting cars. Any car owner can sign up and make his car available for rent. As soon as the car registration on the network is complete the car details are added to the ledger and this car becomes a digital asset.

If you are looking to rent a car, you can check the cars available for rent, and if you like the rate, you can book it and pay with digital currency.

There are smart contracts that we need to enforce some rules:

1. Only the car owner can make his car available for rent or not.
2. You can't be less than 25 years old to rent a car.
3. A security deposit is taken from the renter's digital wallet and is refunded as soon as the rental period ends.

The Blockchain network will only give the renter access to the car if the nodes reached a consensus that the record indicating that the car is available for rent is correct. Only then the renter is given access to the car and the owner gets paid, and the car status is updated on the ledger so it becomes unavailable for rent during the rental period.

• Trust: We needn't a rental car agent or a bank to validate the transaction.
• Transparency: the information that the car is rented is available on the network
• Privacy: Nobody knows that you rented a car, No banks are involved
• Ownership: You, as a renter, can choose to disclose the record of your car rental to whom you want to.

Why can't we afford to miss out on Blockchain?

A recent survey by Deloitte indicated that 98% of the financial service industry executives and practitioners in 10 countries, including the United Arab Emirates, believe that Blockchain has achieved mainstream adoption and that they will lose the opportunity of competitive advantage if they don't adopt blockchain and digital assets.

Startups that are not experimenting with whether Blockchain fits their particular business case they are addressing could be leaving a big room for competition and could be accumulating a huge technical debt if they decide later to switch to DLT.

On the economical side, our region is still undergoing a huge digital transformation on public and private sector services it could be worth experimenting with Blockchain now in its infancy and making the leap to decentralized services.

Many countries around the world have realized the potential of DLT and immensely considering its economical value and looking forward to its impact on the economy and society alike. For example:- The government office of science in the UK has published a report on the uses of Blockchain urging concerned governmental bodies and policymakers to work together to explore the disruptive innovation DLT has to offer.

Conclusion

It is critical to start now to think about the uses of blockchain and contribute to shaping the future of the technology, so 10 years later - after we succeed in the digital transformation - we don't wake up to a world that has already become decentralized, that's the true leapfrogging we want to achieve.