BENGALURU: Blockchain technology owes its popularity largely to cryptocurrency and non-fungible tokens (NFT), both of which are negotiating regulatory hurdles in many countries. However, the revolutionary blockchain technology has applications across sectors and its full potential is still to be tapped. Here’s why:
Simply put, blockchain is a ledger that records transactions which cannot be altered or manipulated. In technical terms, it is a distributed ledger technology that allows secure, transparent, and tamper-proof transactions. Shrikant Bhalerao, founder and CEO of Seracle, says it is a shared database that is maintained by a large network of computers.
Each block in the chain contains a record of transactions, and each block is linked to the previous block by a cryptographic hash. “This makes it very difficult to alter or delete data in the blockchain. Financial and banking industry, supply chain, education, oil & gas, international trade, customs, and insurance are few of the several industries which can benefit from the blockchain technology,” he explains. Apart from storing and recording transactions for cryptocurrencies, blockchain can be used for money transfers, payment processing, Internet of Things (IoT), healthcare etc.
It helps organisations monitor supply chains and address inefficiencies. Also, it helps reduce banking transfer fees as transactions are settled in a few seconds. Not just banks, insurance firms are now also exploring how they could use the technology in clearing and settlement.
Blockchain is gaining traction in healthcare as this technology makes maintaining electronic medical records of patients more efficient as well as secure. From $1.2 billion in 2021, the market size of blockchain in healthcare is expected to grow to $121 billion by 2030, according to global market research company Market Research Future.
Future of blockchain
Since decentralisation offers more transparency and security, more companies are likely to leverage this technology. Nasscom in its recent report said that of the 5.84 lakh patents filed in India between FY10 and FY22, as many as 2.66 lakh were from the technology domain of which 1.6 lakh were from emerging technologies like artificial intelligence (AI), IoT, big data, cybersecurity and blockchain. This shows blockchain experts are in great demand in the job market.
Although it will revolutionise the financial sector, healthcare and real estate, high energy consumption, security and regulation issues remain the challenges of using blockchain. Also, with the integration of AI, blockchain can enhance automation across various sectors. Blockchain-enabled applications will transform payments and financial institutions in future. With increased awareness, blockchain education will spread to the grassroots level and it will soon transform organisations.
Use cases
Smart contracts: These are digital contracts stored on a blockchain that are automatically executed when predetermined terms and conditions are met.
Decentralisation: Facilitates transparency into everything that is being built on the blockchain.
Tokenisation: This allows real-world assets to be converted into tokens which creates more democracy and allows more people to enter the market.