There are several diverse benefits that come from the employment of blockchain technology. The possibilities include government use, agriculture, and maintaining medical records. But that only scratches the surface of blockchain applications with real-world ramifications. This article will take a more in-depth approach to the advantages that can stem from utilizing blockchain.
First, let’s define the more significant terms connected to the subject to add some context to the topic ahead. In this case, we will begin by giving a concise explanation of blockchain technology and some lesser-known terms connected to it.
Blockchain, Pointers, and Linked Lists
Blockchain’s purpose in cryptocurrency is to function as a list of records (or blocks) that link together to create a chain using cryptography. It allows for the distribution of digital data but without the risk of copying it. Cryptocurrency transactions work through a series of computers connected within a peer network of nodes. A community of users controls the updating of all the information. Additionally, as it is a decentralized system, there is no need for the involvement of a third party.
There are two types of keys when using this technology. One is the ‘public key’ that represents your wallet address. That’s how others identify you. The other is the ‘private key’, allowing you to digitally authorize actions (i.e. transfers) based on your public key.
Overall, blockchain provides a sense of trust among all parties involved. Also, it ensures a sense of ownership thanks to the keys.
The average blockchain utilizes two important structures of data: ‘Pointers’ and ‘Linked Lists.’
Pointers are variables for use in programming, which store the address of a separate variable. The most basic variables in any form of programming language typically store data. A normal variable will usually be one that stores an integer value. But in regards to pointers, they store the addresses of other variables and not the values. This is the reasoning behind the name “pointers” because it derives from their function of pointing towards the location of other variables.
Linked lists are a sequence of blocks. Each contains information that linking to the following block via a pointer. They are one of the most significant components in data structures. Concerning these lists, the pointer variable consists of the address of the next node within it and thus, the establishment of a connection occurs. The final node contains an ineffectual pointer, which means that this particular pointer holds little to no value.
The pointer that resides inside each one of the blocks contains the address of the consecutive block. This is how the pointing action initiates.
Regarding the first block on the list and where the pointers go in relation to it, the first block is the “genesis block”. Its respective pointer resides outside of the system itself. A conventional diagram of this would include a unit called a ‘hash pointer,’ which is a pointer that encompasses the hash of the previous block (hashes will be further explained in a bit).
The “Chain” in Blockchain
If it hasn’t become obvious by now, the structure of this set-up is the foundation of the blockchain. Blocks containing important data attach to something as in a chain. A blockchain is a conjoined list consisting of information and a hash pointer that directs to the previous block. Hence the creation of the “chain.” To embellish more on the hash pointer, it shares various similarities to a regular pointer, however, instead of containing just the address of the preceding block, it additionally includes the hash of the data within the previous block.
To clarify what exactly a hash is, it converts an input of letters and numbers into an encrypted product of a fixed length. A hash generally uses an algorithm and is essential to the management of blockchain in cryptocurrency.
Two of the most notable and intriguing aspects of blockchain technology are ‘Decentralization’ and ‘Immutability.’ Next, we take a closer look into these topics.
This is a word that gets thrown around a lot in relation to blockchain and cryptocurrency in general. Before we define it, we’ll provide some context.
The common network format is called the “client-server” structure. At its most rudimentary level, this framework means that all appliances (laptops, cellphones, etc.) connect to one dominant server. It is centralized, and those who want to connect to it need to obtain important information in order to do so. If you want to look something up on Google, you can send it through to the Google server. Google’s server will, in turn, come back with all of the required (and related) results.
This is certainly a stable system that has stood the test of time. But the main problem is the dependence on the server. Because of this dependence, the server must be up and properly functioning at all times. Otherwise, the system can’t work efficiently and correctly. If for whatever reason the main server suddenly stops functioning, then everyone connected within the network will be negatively affected by the halt.
Security Concerns with Centralization
Because this is a centralized network, the server has to handle and work with sensitive and vital information. This means that the system is vulnerable to potential hacks and any other forms of attacks with the intent of obtaining that important information. There is also an issue relating to censorship. A centralized server may decide that a piece of media (a song, a movie, or a book) is not appropriate or is not agreeable with its system and withholds it from any more viewers.
To counteract these shortcomings and concerns, a completely unique type of network architecture was constructed. It divides the workload among those who are participating. These contributors are equally privileged and are called “peers,” and it is from this label that the “peer-to-peer network” came to be. With P2P networks, there’s no longer one central server. Instead, you have numerous distributed and decentralized peers.
One of the key reasons that people gravitate to this type of network is that it provides torrenting. In other words, file sharing. If one were to use a client-server model to download content, then it is prone to incredible slowness. It’s also dependent on the status and well-being of the server, in addition to often being subjected to censorship.
All of this is how and why blockchain technology came into existence.
Immutability means that once something has been added to the chain, it cannot be modified or tampered with in any way. The reason as to why blockchain has this feature is because of the use of the cryptographic hash function.
‘Hashing’ is the action of acquiring an input string of any length and then producing an output of a fixed length. In relation to cryptocurrencies such as Bitcoin, the transactions are taken as an input and then it is run through a hashing algorithm (Bitcoin’s algorithm is SHA-256), which gives an output that is of a fixed length. Concerning SHA-256 and its own system, no matter how big or how small your input may be, the eventual output will have a fixed 256 bits length regardless. This is something that becomes critical when dealing with a large amount of data and transactions. So instead of having to remember the often huge input data, you can simply just remember the hash and keep track of it.
Cryptographic Hash Functions
Now, the aforementioned cryptographic hash function is a distinctive kind of hash function. That’s because it has various types of properties, which is why it is ideal to use for cryptography. There are several factors that a cryptographic hash function needs in order to be officially secure:
- Quick Computation
- Pre-Image Resistance
However, for the purpose of this article, we will focus primarily on a property called the ‘Avalanche Effect.’
This is a desirable system of block ciphers and cryptographic hash functions. It’s also when the output changes significantly despite small changes that are made to the input. If you were to alter just the first alphabet of the input, it would drastically affect the output hash.
Before we move forward, let’s go back to what was said about blockchain framework and hash pointers:
“If it has not become obvious by now, the structure of this set-up is what blockchain is based on, what with blocks containing important data being attached to something akin to a chain and all. A blockchain is a conjoined list consisting of information and a hash pointer that directs to the previous block, hence the creation of the “chain.” To embellish more on the hash pointer, it shares various similarities to a regular pointer, however, instead of containing just the address of the preceding block, it additionally includes the hash of the data within the previous block.”
What Happens with an Attempted Hack
If a hacker were to attack block 5 and try to change the data in any way, due to the properties pertaining to hash functions, any slight alteration in the data will inevitably change the overall hash. Any changes that are made to the information in block 5 will end up changing the hash that is stored in block 4. This, in turn, will modify both the data and the hash of block 4. Then also it will then affect block 3 and so on.
This would lead to a complete change in the chain, which is close to impossible. This is precisely how blockchain technology attains immutability.
Hopefully, now you have a good idea about the complexity behind blockchain technology. Now we can finally take a closer look at the applications associated with blockchain that are used in different industries.
Application #1 – The Food Industry
The marriage between the food industry and blockchain technology may sound outlandish. But in actuality, there are a good amount of big shopping chains that are teaming up with IBM to implement a blockchain into their food management systems. This collaboration stems from the question consumers ask today: “Where is all my food coming from?”
The number of people becoming apathetic towards their food sources may be gradually increasing. This increase is resulting in a large number of problems to not just the consumers, but also the suppliers.
On October 6, 2005, several states in the US went through a colossal outbreak of E. coli which was caused by – of all things – spinach. The epidemic affected almost 200 people. Some of which were children under the age of five. Thirty-one of them went on to develop a specific type of kidney failure called “hemolytic uremic syndrome.” Three people died as a result of this outbreak, including a two-year-old child.
The E. Coli Epidemic
This E. coli surge sparked commotion throughout the entire food industry. People were scrambling to track down the source of the infected produce. This led ultimately to grocers immediately pulling all the spinach from the shelves. After about two weeks of searching, the Food and Drug Administration (FDA) finally found the source of the contaminated vegetable. But during those two weeks, there was no spinach available in any US markets.
The source turned out to be one single farm supplier. One farm singlehandedly – albeit unintentionally – put the livelihood of hundreds of other farmers at risk for two whole weeks. This situation was not necessary. If there had been a better and more efficient way to trace the source of the spinach, the response and subsequent losses would have been much less.
Tracing food is obviously a time-consuming process. During this lengthy-time period, it is possible for certain industries to either slow down or close altogether. The best way to go about tackling this issue is to make the itinerary as transparent as possible. Specifically, from the time when the food is at the farm, to the time of delivery to the market.
Tying in Blockchain to Food Supply Problems
One can typically define Blockchaink as an open ledger. Any data within it is open for everyone to view. Additionally, there’s no central authority to take control of the records. This removes unnecessarily wasted time on regulation and hierarchy while making the process much faster by comparison. Plus, having the data on the blockchain reduces the average waiting time considerably from weeks to seconds.
This is such an appealing system that Walmart has already run two tests with IBM. One with Mexican mangoes and the other with Chinese pork. They used ‘Hyperledger Fabric,’ which is a blockchain implementation out of IBM. Now, the Linux Foundation hosts Hyperledger. According to a Fortune article on the subject, “Frank Yiannas, vice president of food safety at Walmart, was so pleased by the pork and mango trials that he rallied peers to join the cause. ‘We were so encouraged that we really quickly started reaching out to other suppliers and retailers as well,’ he told Fortune.”
As blockchain technology becomes more involved with the food industry, it will make the entire procedure safer and more transparent. Online food safety program, Yiannas, lists multiple advantages of a transparent food system, as seen below.
Advantages of a Transparent Food System:
- It will greatly enhance the security of the food
- It will guarantee fresher food since it is very unlikely that anyone would want to risk sending food that is not fresh into an open system
- There will be a lesser amount of food waste due to the tracking of every piece of food.
- It will put a stop to food fraud because the system is open for everyone to see and monitor
- The presence of an open system will promote responsibility among those that produce the food since they are now aware that they cannot get away with any crafty dealings
Application #2 – Cybersecurity
The Equifax Data Breach
On September 7, 2017, Equifax, one of the largest and most prominent consumer credit reporting agencies, disclosed that they had just gone through a massive breach in security. Roughly 145.5 million people were in danger of having important pieces of personal information stolen. This data breatch included consumers’:
- Social security numbers
- Dates of birth
- Driver’s license numbers
Yahoo!’s Major Data Attack
As shocking as this may seem, this was not the first instance of a cybersecurity breach occurring to a renowned company. Yahoo! had faced its own major attack back in 2016. About one billion user accounts had been jeopardized, with the attackers managing to access:
- Phone numbers
- The answers to security questions
Due to there being a ton of ‘do it yourself’ guides online about how to hack Yahoo!, the 2016 attack was not the first time the website and its accounts had this problem. In hindsight, if there are numerous DIY guides that teach others how to hack your site, chances are pretty good that your security is compromised greatly.
Verizon Submits Research
Verizon and other security companies did some research into these data breaches. They discovered that 65% of data breaches were the result of passwords that were either default, weak, or stolen. According to their findings, the primary reason as to why these sort of attacks came about is due largely to the people being inherently unsuspecting and naive. They fall for these attacks and proceed to give away vital information, such as passwords and credit card details.
As reported by Verizon, about 23% of people open fraudulent emails. Half of them go so far as to open any attachments that might be sent along. To properly understand the depth of this issue, keep in mind that cybercrime costs the global economy approximately $400 billion annually.
Blockchain can assist in preventing these cybersecurity attacks by utilizing these three features:
- A trustless system. A blockchain system will typically run without the need of any ‘human’ input or reliability.
- Immutability. The blockchain allows a user to store data and protect it using a number of cryptographic properties like digital signatures and hashing. What makes this specific feature appealing is that once information is placed into a blockchain, it cannot be modified.
- Decentralization & Consensus. Blockchain is a decentralized system. It is made up of a large number of nodes. In order for any decisions to be considered or executed, the majority of these nodes need to come to a general consensus. Because of this, we have not a central authority, but instead a democratic system.
These properties are what make blockchain technology capable of ensuring cybersecurity. It allows for the protection of users from any potential system attacks.
These are a couple of examples of blockchain companies taking initiative when it comes to disrupting cybersecurity space:
- Guardtime is a data security startup that was founded in 2007 by Estonian cryptographer, Ahto Buldas. The company’s goal, as stated on their website, is “…eliminating the need for trusted authorities within Estonian Government networks. Since then we have become a global company with offices across five continents with vertical business units across defense, telecom, life sciences, financial services, energy, government and others.” Recently, they began inputting their sensitive data onto the blockchain for the intent of gaining added security. Most security companies incorporate the use of the ‘Public Key Infrastructure’ (PKI). This uses a supply of public keys and Asymmetric Cryptography. An issue arises from this, however. Because these keys are preserved by a centralized entity (i.e. Certificate Authority). Thus, the system is centralized and at a higher risk of attack.
To remedy this problem, Guardtime is using the blockchain to construct a ‘Keyless Signature Infrastructure’ (KSI) to stand in lieu of the PKI system. Over time, it has become the largest blockchain company in the world purely by the revenue, the census, and the customer deployments. As a matter of fact, the company had obtained all of Estonia’s one million health records in 2016 just by using these systems.
- A long time ago, before the digital age, our data was stored in huge vaults that were protected by guards. Evidently, there are flaws in this system. Like how it is incredibly inconvenient to go to a vault whenever you need access to your information. Additionally, you’re depending on other people to remain trustworthy. Of course, everything changed when we started to use passwords and usernames. But even that conventional model is risky because all that data gets saved into a centralized server. It could be a victim of a hack at any time.
REMME Authentication System
REMME is a user authentication implementation system that formulated the concept of making passwords obsolete. Each device will obtain its own Secure Sockets Layer (SSL) certificate. Information goes into the blockchain and because the chain is immutable, data stored in it can’t be modified. This way, all of the devices and their classified data are in safe hands.
Still, there is a certain drawback to utilizing blockchain for the purpose of cybersecurity. David Treat, the man who heads the blockchain practice at global management consulting firm, Accenture, states that while blockchain is a brilliant and handy piece of technology, it is not designed to handle a massive amount of data. Companies like Equifax manage a large quantity of information. Thus, a blockchain might not necessarily be the best way to store it all. He did, however, add that blockchains are helpful in allowing people to employ control over their own identity.
Application #3 – Voting
When it comes to a democratic government (or democratic anything), voting is obviously an essential tool. It’s also a primary factor in making a government “of the people, by the people, for the people.” This voting custom is what equates to a free country. With that in mind, it is a peculiar thing that we have partially moved beyond the traditional system of using paper ballots.
The concept of the paper ballot system is simple and straightforward. You place your vote on a piece of paper and then put that paper inside a ballot box. At the end of the election, the submitted votes are counted with the winner having the most votes.
As elementary as this particular system sounds, there are a good number of consequences and problems that can occur.
Challenges with Traditional Voting Mechanisms
- The system cannot be run on an operation that is automated. It’s also extremely tedious to carry out. To participate, you have to physically go to the venues. There’s typically a long line of people waiting to get to the ballot boxes. To put simply, the process is time-consuming and can be inconvenient for some, especially those with mobility issues.
- The average amount of time needed to manually count the ballots is very high.
- The election is vulnerable to hijackings through the inclusion of counterfeit ballot papers.
- Parties that are comparatively more powerful can use intimidation tactics at venues to rig the election in their favour.
- There are environmental issues due to the amount of paper waste.
- There is (currently) no form of historical record possible to keep track of each and every vote that is cast.
- The standard cost of paper ballot investments is excessive.
- It is next to impossible to keep track of your vote.
- As soon as you have cast your vote, you are unable to change it.
Estonia’s Unique Voting System
To rectify all of these disadvantages pertaining to a paper ballot system, countries like Estonia have been applying the use of a more digital voting system. A group of writers from Plymouth University wrote an Economist essay about the subject. In it, they stated that “Estonia has had electronic voting since 2005 and in 2007 was the first country in the world to allow online voting. In the 2015 parliamentary election, 30.5% of all votes were made though the nation’s i-voting system.”
There are potential issues related to this system that was also highlighted in the Economist essay:
- First of all, the machine on the client side could develop malware. This could have the ability to read each and every vote that has been cast and then change the vote to be in favor of the other candidate.
- Furthermore, an attacker can promptly infect the main server(s) through malware that is placed on DVDs that are used to set up the servers and also transfer the submitted votes.
These issues have since been criticized and disputed by the Estonian Information Systems Authority. But the fact remains that for every perk to a centralized server handling votes, there is also an additional drawback. Including being vulnerable to various attacks and hacking.
From here, we transition to the solution brought about by blockchain.
A Blockchain Voting Solution
There have been an array of companies that are using both blockchain technology and Elliptical Curve Cryptography (ECC). These systems update the voting process and bring it into the digital era. The primary goal is to make the traditional election process as transparent as possible. One of these companies is Follow My Vote, an online voting platform whose “…ambition is to build a secure online voting platform that will allow for greater election transparency.”
With this platform, any potential voter is able to securely log in to the system using their webcam and government-issued ID. After they are done with the voting, they can use their voting ID to keep track of their votes. They can even check to make sure that it has been cast correctly. Moreover, this system gives voters the chance to change their votes under a certain deadline.
How “Follow My Vote” Works
To create the votes, Follow My Vote utilizes ECC. This structure of asymmetric cryptography functions with the use of the two keys to encrypt and decrypt data: a public key and a private key. To put it simply, ECC is essentially what Bitcoin and Ethereum use for their own cryptography. It should be noted that the private key should not be shown to anyone. However, the public address generated by both the user and the public key is shared with others.
The way in which Follow My Vote uses this type of technology to construct their votes is that during the period of voter registration, the voter will create two ECC key-pairs. This essentially reveals their identity to a verifier who will certify the first key-pair. Following this, the voter will enlist their second key-pair anonymously as belonging to the first key-pair. The first key-pair is called the “identity key-pair”. The second pair is labeled the “voting key-pair.”
Once this has all been established, the voter is then able to initiate a transaction. This is pretty much their vote. They can then send it off by using their voting private key. After the completion of the vote, anyone can validate the authenticity of the signature. That way they can make sure that none of the votes have experienced tampering in any way. To verify whether the voter was the one voting, they can simply use the voter’s public key.
Application #4 – Land Registry
India has reportedly been having issues regarding property fraud and its land registry. So they have been looking into using blockchain technology as a means to solve those problems. In the year 2013, New Delhi had a recorded 181 cases involving property fraud. Mumbai’s number came pretty close, with 173 cases under report.
In an attempt to fix this recurring situation, the governments of Telangana and Andhra Pradesh have teamed up with a Swedish startup called ChromaWay to implement their land registry onto the blockchain. The execution of this collaboration is fairly clear-cut, as the system will have a blockchain back-end and a web app as a back-end. The front-end will assist in the overall system cogitation and ChromaWay will be employing its own database platform that is called ‘Postchain.’
According to the International Business Times:
“Postchain is built from the ground up to work with most widely-used platforms, and integrating it into the government’s systems is done seamlessly.
“From the user point of view, everything is presented in a transparent way for citizens to leverage blockchain technology to buy and sell lands without any hassles.”
A notable innovation that could possibly come along with this system is the installation of cryptographically secure digital fingerprints, and this is how it could potentially work:
- A hash is acquired that consists of the geographical coordinates along with a polygonal sketch of the land.
- This hash is tied to the owner’s ID and the outcome is hashed yet again and then included into the blockchain.
- Given that the hash is always a unique value, everyone involved will have a unique ID. Additionally, due to the chain’s immutability, no one has the ability to alter or meddle with the records.
J.A. Chowdary, the special chief secretary and IT adviser to the chief minister of Andhra Pradesh, expressed how he felt about blockchain technology:
“Blockchain is the technology of the future. It will not only change the way we perceive processes but it also has the potential to transform the economy. Of course, we all are yet to fully discover this technology and hence the Government of Andhra Pradesh has engaged with startups from across the globe such as Chromaway to run proofs of concept within its own departments.”
A potential application – Pandemic prevention and/or mitigation
In light of the COVID-19 outbreak, many are starting to wonder if blockchain technology could have a hand in dealing with it. What’s more, if could it do the same thing for other potential pandemics.
Generally speaking, a blockchain is a valuable tool for establishing a healthcare business model that’s both efficient and transparent. Moreover, a model that draws primarily from higher degrees of accuracy and trust. This mostly because the technology is a tamper-proof public ledger. Obviously blockchain will not prevent the rise of new viruses by itself. However, what it is capable of doing is creating the first line of rapid protection through a network of connected devices. The intent of this connection is to remain up-to-date about any disease outbreaks.
With blockchain technology, we are able to share any and all information in real-time between relevant parties acting as nodes in the chain. Even better, we can do so in a secure and immutable manner. In the case of COVID-19, if there was a blockchain in action that shares real-time information about communicable diseases, things may have been different. The world might have been aware of the spread much sooner. There may have been travel restrictions put in place earlier and a faster implementation of quarantining policies and social distancing.
While it is too late for the case of the coronavirus, perhaps outcomes of any future pandemics could be different.
Updated on August 25, 2020
Blockchain Applications – In Conclusion
There are only four blockchain applications within this article. Yet each application provides a tremendous number of advantages for those who use it. It is comforting to know that blockchain isn’t just about currencies. Indeed, it’s usefulness can apply across a number of fields. With companies showing interest in it and incorporating it into their systems, it’s evident that blockchain has become a multipurpose phenomenon.