Blockchain is not an additional technology for cryptocurrency, but a fundamental feature of cryptocurrency. Ultimately, blockchain and cryptocurrencies are united by a common beginning. However, they are by no means of similar caliber; when one versus the other, blockchain goes beyond cryptocurrencies. Not limited to the financial sector, blockchain offers many solutions that could disrupt various markets in the coming years.
The reason the terms have become so synonymous is probably because the first blockchain was a database that stored every bitcoin transaction. When it emerged in 2009, blockchain was not known as such. It got its name because of the way transactions were grouped into blocks of data and then bundled into a chain using a mathematical function that creates a hash code. The design existed before Bitcoin, but it was this revolutionary and first cryptocurrency that led to the prominence of the system.
Three innovative blockchain applications
You don’t have to go far to make a list of innovative applications of blockchain technology. Even the most non-technical areas find applications for the decentralized database – health care, politics and voting, real estate, government and education – all find uses for its powerful and secure way of storing, verifying and encrypting data. Here are three other applications of blockchain technology, some of which are emphasized by cryptocurrencies:
Finance.
The financial sector was built on the need to transfer money from one person to another. This required a reliable intermediary in the form of a bank. This ensured the safe transfer of money. Blockchain now effectively eliminates these intermediaries by decentralizing transactions. A decentralized marketplace offers buyers and sellers security within their transactions, reducing the threat of cyberattacks and encouraging transparency between the parties. Bitcoin is a perfect example of this, and if applied at scale, could potentially facilitate millions of financial transactions a day.
Smart contracts.
Smart contracts act as self-executing programs that simplify the terms of the agreement between seller and buyer directly through code. This agreement and code exist in a distributed, decentralized blockchain network, making transactions traceable, transparent and irreversible. This type of automation can dramatically increase productivity and reduce costs in business. Simply put, it helps you exchange property, stocks, money or anything of value without conflict and transparently, while avoiding intermediary costs.
Greater cybersecurity.
Blockchain communication is transmitted and terminated using advanced cryptographic processes that confirm that the information is coming from the correct source. This technology makes sensitive information less likely to be intercepted by hackers, thereby providing better data protection.