A wise man doesn’t seek the right answers, he seeks the right set of questions.” — Claude Levi-Strauss
Blockchain has succeeded in getting the attention of many businesspeople and technologist alike.
Although its applications are far-reaching, many people are skeptical about how it will directly benefit them. Since blockchain is a nascent technology, people still have got many questions.
Truth to be told, after the Bitcoin buzz, we also had questions regarding the success of blockchain. However, now we, at Oodles, think that blockchain is leaving a mark for itself on the digital world with untouched possibilities that various industries can leverage.
For those who still have doubts, here are blockchain questions and answers we gathered while consulting with clients and speaking on technology panels.
Blockchain, after cryptocurrencies, is getting attention for providing a single source of truth among organizations that mainly deals in big data (for instance, logistics information, invoices, etc.).
Applications of Blockchain can enable the integration of previously siloed organizations or simpler integration services.
For instance, businesses dealing in supply chains can use blockchain based supply chain solutions to track materials from suppliers seamlessly.
Also, fintech businesses can use blockchain based fintech solutions to keep endless track of financial transactions. Additionally, such supply chain solutions can automatically employ smart contracts among involved parties, making transaction error-free and flawless.
This question is the result of failed online advertisement and word-of-mouth. Even after numerous real-world examples, people are still not able to see the real-world use of blockchain around them.
Recently, Walmart asked its suppliers to leverage blockchain for improved supply chain management system. Interestingly, if you remember the E. coli outbreak in the United States in 2006 may know how much time it took the industry to find out the source of the bacteria, found in spinach to a specific farm.
The outbreak affected nearly 26 states and represented a loss of trust and revenue.
However, now with blockchain based supply chain system, similar to one being used by Walmart, we can trace the source of food in seconds.
Blockchain use cases are everywhere. The technology is disrupting almost every industry. For instance, Kodak is utilizing blockchain for digital rights management. Intel’s Sawtooth project enhances tracking seafood in the supply chain. Everledger tracks diamonds. Etherisc is working on event-based automatic insurance payouts. Numerous healthcare companies are exploring EHRs (Electronic Health Records) and other applications based on blockchain. Fintech organizations are tapping into blockchain for quick and safe international money transfers, escrow and raising capital.
Although blockchain and cryptocurrencies relate to each other, there is no such obligation for developing a new cryptocurrency for blockchain application development. For better understanding, refer to this guide.
Cryptocurrencies like Bitcoin and Ethereum are the means used to store and exchange value. While many people consider cryptos an alternative to fiat currencies, others see them as a store and exchange of value.
Blockchain is the technology that power cryptocurrencies. For instance, Bitcoin, the first cryptocurrency, has blockchain as its underlying protocol.
In the United States, the SEC considers cryptos as securities. If you develop a blockchain solution that uses cryptos, it may require you to evaluate the process and implications considering the SEC registrations.
On the flip side, the IRS sees cryptos as property. If you’re indulging in crypto trading, you will need to file income tax on any appreciation of the assets. Eventually, when developing a consortium blockchain, make sure you are not creating an environment of price fixing and collusion.
There are public blockchains like Ethereum, as well as permissioned blockchains, such as Hyperledger, Corda and many others.
Anyone can become a network member in public blockchains. Permissioned blockchains intend to serve a specific number of parties typically found in an enterprise ecosystem.
Yes, there are some pitfalls.
Firstly, it’s a nascent technology. The original blockchain implementation is 10 years old only, while Hyperledger and Ethereum are only three years.
To conclude, the existing state of blockchains is roughly comparable to the state of the internet.
Although blockchain is a promising technology, to be universally useful, it will have to evolve.
It depends on the type of blockchain. For instance, with public blockchain like Ethereum, everyone on the network can see every transaction. For most enterprise use cases, it might not be the right implementation.
A permissioned blockchain framework like Hyperledger Fabric allows a much more fine-grained level of authorization.
We hope this article of blockchain questions and answers has succeeded in explaining important things revolving around blockchain.
The bottom line is, the technology can positively impact not only businesses but the world at large.
However, blockchain is still in its initial phase of adoption. Only time can tell us what will become of blockchain technology.