Blockchain without crypto: Adoption of decentralized technology

A blockchain can be seen as a distributed database whose information is stored across each node running the network. Because the database is distributed among the operators of the network, it guarantees that the data stored in it is accurately and securely stored.

As the name implies, blockchains store their data in blocks that are added to the network over time. Each subsequent block is based on the information stored in previous blocks, which means that block chains form a data timeline that can be reliably trusted.

When it comes to cryptocurrencies, the blockchain secures trust and solves what is known as the Byzantine general problem, which describes the difficulties that scattered parties have in reaching consensus. Since Bitcoin uses blockchain technology, one can accurately confirm that funds are not used twice, that the offer is limited, and the history of transactions on the network.

The technology goes beyond these use cases, but a number of companies and organizations have already used blockchain without cryptocurrency.

Blockchain technology is commonly associated with cryptocurrencies, with the Bitcoin Network as its number one use. At its core, however, a blockchain is a distributed ledger that is shared between a network of nodes, which means that use cases go far beyond cryptocurrencies.

Blockchain use without cryptocurrency

Cryptocurrencies steal most blockchain-related headlines, but adoption has been increasing for the technology. An example might be IBM working with the Abu Dhabi National Oil Company to pilot a blockchain supply system for oil and gas production.

There are several other examples, including Da Beers Group which traces high value diamonds along the supply chain with a block chain and JPMorgan uses the technology to calculate loan collateral.

In a conversation with Cointelegraph, Johnny Lyu, CEO of cryptocurrency exchange KuCoin, noted that the use of blockchain is “common among government agencies and companies”, pointing to the Global Shipping Business Network (GSBN), a consortium that expects the participation of large institutions including the Bank of China, DBS Bank and HSBC, as an example.

GSBN has tested the integration of its own blockchain platform to digitize and track container shipments. Lyu also noted that the Indian state of Maharashtra has begun issuing verifiable throwing certificates on the Polygon network, while the Romanian Financial Supervisory Authority implemented blockchain technology to “accelerate workflows and reduce the time for manual processing of large arrays of data.”

The examples continue, Lyu said, noting that it would “take a long time to list all the latest blockchain initiatives launched in 2022,” adding:

“There is no doubt that we are seeing massive and widespread use of blockchain technologies, and the number of companies doing so will grow every day. Blockchain is becoming a necessity, just like websites and business accounts in social networks once. became such. “

Ben Livshits, CEO of the blockchain platform Zilliqa, told Cointelegraph about another use: The UN World Food Program has implemented blockchain technology in its building block project, so that involved organizations can “collaborate, execute transactions and securely share information in real time on a neutral network without hierarchy” . »

The program, noted Livshits, has “already processed over 15 million transactions and supported over 1 million people.” Several other companies, including Ford, FedEx, Walmart and Maersk, have either piloted or actively used blockchain technology.

The benefits of using blockchain technology are many, and as a result, investments in the area have been significant.

Advantages of blockchain technology

Taking a food and beverage business as an example, Livshits noted that blockchains can provide “the necessary openness that consumers today demand and expect” then “the average consumer today no longer just cares about what they eat and how it is cooked, “but consider where the ingredients are sourced and how they are handled.

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Livshits added that the use of blockchain technology could become mainstream and “even help with faster payments.” He said:

“The benefits are clear: Reduced human error, better access to information, increased security, traceability and transparency that can ultimately help reward all those across the supply chain in an adequate way.”

Blockchain technology, like any other technology before it, should “be about creating value and benefit for users,” Livshits said.

Sankar Krishnan, executive vice president and chief operating officer for banking and capital markets at Capgemini Financial Services, told Cointelegraph that blockchain technology is “very ESG-friendly”, citing environmental, social and governance standards that investors have increasingly taken into account.

Krishnan added that most people are not aware of “how many parties there are in a supply chain transaction.” The large number of parties involved means that a lot of data must be tracked, including data related to importers, exporters, the transaction itself, the product, shippers, marketplaces, logistics companies, insurance companies and other intermediaries.

He added that each of these parties either prints information or exchanges it via email several times, using resources. All this consumption, Krishnan said, would be eliminated if transactions were processed on a blockchain.

In addition, Krishnan added, a blockchain provides more transparency and improves the tracking capabilities of raw materials, while making data available to all parties involved at the same time, significantly reducing the risk of fraud. He added:

“What is actually happening is that all manual workflows are being replaced by smart contracts, and there is agreement between all parties involved on how these workflows move around the blockchain.”

According to the analyst: “The industry is set to benefit from using blockchain and smart contracts,” with very specific use cases that have evolved for financial services, healthcare and retail. Krishnan also pointed to loyalty program administration, royalty payments and public applications as other uses.

Despite all these uses and opportunities, there is a reason why not all companies in the world dive into the blockchain world and that the technology is not used a lot.

Blockchain problems

While the use of blockchain technology has continued to grow in recent years, some companies have not yet begun to adopt it despite the many benefits offered. The problem with this type of technology is the investment required to implement it.

That’s according to Arry Yu, Cascadia Blockchain Council leader at the Washington Technology Industry Association. In a conversation with Cointelegraph, Yu said that implementing software technology at the enterprise level requires a “significant investment”, adding that a change in management may also be necessary since some stakeholders may not want the transparency given.

Yu added that training stakeholders in new processes and developing the right types of reports that provide each stakeholder with meaningful key performance indicators also increases costs, as does the “huge amount” of pre-investment “related to process design, documentation, training, support and more.

Kieren James-Lubin, president and CEO of blockchain solution provider BlockApps, told Cointelegraph that while this type of technology “ensures that data is not altered or deleted”, it does not ensure accuracy, as “this depends on who submits information – manual data entry may be subject to errors. “

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One solution to these errors, the CEO added, would be the use of accurate Internet of Things sensors to “pull data directly.”

Blockchain’s use cases are growing regularly, and implementers are still figuring out exactly what can be done with this type of technology and how far it can go. When Bitcoin (BTC) was first launched, smart contract-based applications such as those now seen on Ethereum were unheard of.

The technology can still help to revolutionize several industries, even if it is a little over a decade old. It remains to be seen whether Satoshi Nakamoto’s best invention for the rest of the world was Bitcoin or its underlying blockchain.