Business: The Future of a Decentralized Network
By Aiden Messett and Taylor Chiesa – Staff Writers
When one thinks of cryptocurrency, perhaps the first image that comes to mind is the proverbial bitcoin or even a poorly pixelated picture of a monkey NFT. However, the exuberances displayed by participants of the 2021 crypto craze have distracted people from the unfathomable potential of blockchain, the technological foundation of crypto currencies.
The term “blockchain” has become more common within the last few years but the core understanding is a bit technical. It is a particularly new concept and only used within niche industries and financial technology companies, but that is likely to change.
Data management and storage are foundational to our modern technology-oriented society, and data privacy concerns are a massive expense for companies who have millions of daily transactions that need to be translated into data and stored securely.
Evidently, blockchain, if developed properly, offers a cheaper and safer solution for these companies who have come under scrutiny recently for the lack of security present in their data storage techniques.
On the most basic level, blockchain is a ledger, or a list of records that is chained to a block. A “block” can be simplified as a cluster of data that is encrypted or put into a secret code. A block can only be added if an action, or transaction, has taken place, which is then verified, stored in the ledger, and then given an encryption.
Chaining the data to the previous blocks allows for data organization that cannot be manipulated without disruption of all subsequent blocks, which would be nearly impossible.
Moreover, these blockchains are monitored and built by multiple connected nodes (peer-to-peer), where a node can be lucidly seen as a computer which, when connected to others, makes a network. This allows blockchain to remain operating under the theory of decentralization, where a community of computers can analyze the current ledger instead of a central group regulating the bulk of the data.
Despite the commonly held understanding that blockchain can only be used to decentralize currencies, there are a plethora of other potential uses that we may see in the near future.
For example, musicians and other artists can utilize blockchain technology to ensure that their work is not replicated without permission, since their files can be encrypted to prevent piracy. In addition, artists can use blockchain to track playbacks on streaming services along with a smart contract to distribute payments, which would lead to greater compensation transparency.
A great example of a potential future use of blockchain could be found in the insurance industry, where insurance claim data, health insurance data, and legal documents create remarkable data storage expenses. If insurance companies did not have to spend significant sums of money to securely store massive amounts of sensitive data, they could ultimately lower the cost of premiums for customers. Altogether, a health care provider can easily access this information through a decentralized means, bringing cheaper and improved quality care to people in general.
Although many of us are fond of the social media we consume on a daily basis, many are growing increasingly concerned about the security of our data. Rather than keeping our precious data stored on a centralized server, like it is now at Amazon, Apple, and Google data centers, blockchain would create a decentralized network to eliminate data tampering.
When we take a step back, we must be critical of the methods used to store our data today, considering global increases in cyber attacks. People are quick to criticize blockchain because it is a complicated technology that lacks credibility. However, the applications of a blockchain would resolve much of our data privacy concerns and expenses, despite the inherent complexities of the technology.
This technology can be used for more than financial securities and cryptocurrencies, especially as it relates to data storage.
Many companies, such as Apple, J.P. Morgan, Google, and Facebook, are already signaling towards the use of blockchain for future endeavors.
As we can see, blockchain is not designed to benefit solely the technologically savvy.