Blockchain: A Revolutionary and Disruptive Technology
Blockchain has been in existence for almost a decade, but it is only in recent years that its full potential is being exposed: to revolutionise the online retail space, disrupt traditional services and offer innovate new solutions well beyond the finance sector.
Many of us are familiar with the Bitcoin frenzy, but we are less familiar with the complex systems supporting this crypto-currency. Blockchain is essentially the distributed database that stores and maintains records. It consists of blocks in which records are stored, with all these blocks connected with each other. Whereas standard databases are often controlled by a single person or organisation, Blockchain is different in that its database is decentralised, so that no individual party can tamper with the records.
The retail world is rapidly changing, especially in the face of huge online companies like Amazon. While many businesses are developing an online presence, online retail does have its shortcomings, particularly for small manufacturers and businesses. They lack the capacity to compete with the major online retailers and subsequently lose out to cheaper imitations that can be found in bulk on the internet. Blockchain makes it easier to create a digital retail space that connects manufacturers directly with buyers, losing the need for middlemen and revolutionising the online marketplace.
How can Blockchain Help?
When shopping online, retailers generally still rely on old-fashioned, centralised systems like banks, and even where online payment methods such a PayPal have been developed, these are also connected to bank accounts or credit cards. As such, there are additional fees on payments where these middlemen take their commission. Blockchain removes the need for these financial services, allowing companies to increase profits while the cost is lowered for consumers. It’s a win-win situation.
Additionally, this has the potential to be a hugely disruptive technology for the financial services sector, since Blockchain will undertake the roles they usually carry out – recording transactions, establishing identity and establishing contracts. It is in this third role, in establishing contracts, that Blockchain can extend its use beyond the financial services sector. Indeed, Blockchain can be used not just to store a unit of value, but any kind of record. In the realm of cybersecurity, for instance, REMME is using Blockchain technology in an attempt to replace logins and passwords, which are often easy to hack, with SSL certificates which are stored on a Blockchain.
Like any technological advancement though, Blockchain has its limitations and pitfalls. To start with, the technology is still not widely understood and is complicated to explain. Where people are familiar with Blockchain is often through the lens of Bitcoin, and many are still cautiously waiting to see how Bitcoin fares before embracing these technological advances. And while Blockchain has been touted as a more secure type of database, it is only strong if it has a large network of users, otherwise it is vulnerable, since these users are not as widely distributed.