Blockchain was first introduced by a person or group of persons known as Satoshi Nakamoto. By way of definition, blockchain is described as an immutable digital ledger which is originally for economic transactions, but is capable of being programmed to store almost anything that has value.
For several people, blockchain is synonymous with Bitcoin and sometimes cryptocurrencies. While it is common knowledge that the first known use of blockchain technology was for bitcoin and cryptocurrencies purposes, it is however, not true that it is strictly for crypto purposes only.
The uses of blockchain transcends cryptocurrency purposes. The technology has gone on to prove useful in several industries and has, and still is, championing revolution in these industries. From governments to manufacturers to business enterprises as well as consumers, blockchain technology has brought positive changes to traditional operations. The purpose of this article is primarily to discuss some real blockchain solutions for customers.
1. Blockchain For Tracking Sources of Products
As earlier noted, blockchain has an immutable ledger system. This feature makes it suitable for tracking of goods even right to their sources. There are specific products that consumers would feel better using if they knew the sources. For instance, whether or not a particular food produce was sustainably farmed. With the ledger system, a consumer can easily know the source of the goods and even the parties the product has passed through before reaching the final consumer. Australia, for instance, is setting up one of such projects. The Sustainable Sugar Project as it is called aims to utilize encrypted data on a blockchain technology to clearly show the sugar buyers the source of the sugarcane used in the sugar production as well as the sustainability of the farm.
2. Blockchain For Sending and Receiving Products
The Internet of Things is being combined with the blockchain technology to make the process of sending and receiving products easier and more efficient. For example, IBM Watson IoT and Blockchain offerings makes it possible to also track product each phase in the supply chain. Doing this is easier because they have access to detailed information about the particular package and they can get updated through GPS as the goods move from one location to the other. In addition, it allows the easy release of payment at each phase when the transaction has been verified successful. Since the information is contained in the blockchain, it means neither of the parties have to prove anything about the delivery status of a good since the blockchain technology helps keep track of that.
3. Blockchain For Sending and Receiving Payments
This is like the most popular use of blockchain which is the transfer of virtual currency from one person to another. Blockchain allows for a secure and transparent method of transacting without a need for a centralized banking body. This removes the need for third party to act as middle men.
The traditional banking system has so many features that not only slows down the transfer of funds. For instance, with the traditional banking system, identity verification takes quite a while. In fact transferring money internationally may also take longer period and comes with excessive fees. With blockchain technology on the other hand, consumers can make their payments using a system that reduces or even totally eliminates the issues characterizing traditional banking. It allows the free transfer of money from customers and businesses with no payment processors or banks acting as intermediaries. It also reduces the time for processing payment to minutes which could sometimes take days or weeks for traditional banking. Mastercard has adopted this technology with the hope of providing an alternative mode of payment for consumers. Thus rather than swiping a card, a person can easily transfer money from one place to the other all thanks to the blockchain technology. Note that Mastercard’s blockchain service is for traditional currencies and not cryptocurrencies.
4. Smart Contracts on Blockchain Technology
Not only does blockchain impact transactions on non-physical goods, it also proves useful for transactions of non-physical goods, i.e. services. The smart contract on blockchain technology makes this possible. By utilizing this, specific contractual obligations can be linked to specific actions via an IF/THEN model. In essence, once the smart contract is set up, specific actions take place when certain contractual conditions are verified on the blockchain as already fulfilled or not.
In practical terms, if a customer for instance signs an agreement with a particular firm for a service to be delivered on a particular date, such transaction is stored in a smart contract which is subsequently recorded on the blockchain. Should the firm fail to deliver the service on the agreed date, then the customer is entitled to a refund. Alternatively, if the firm carries out the service as agreed and the consumer verifies, payment is automatically transferred to the firm.
All these transactions on the blockchain are publicly verified. In addition, the transactions are immutable and can, therefore, not be tampered with or altered. These features ensure that all parties are permanently bound by their contractual obligations and the actions based on them cannot be altered by anyone.
Often in normal transactions, customers are faced with difficulties when the firms and service companies fail to fulfill their end of the bargain. The customers have to go through the stressful process of seeking compensations for breach of contractual obligations. In cases where their own actions are not enough and there is a need to bring in third parties, things often escalate and get more complicated. This is because they would have to verify the claim of contractual wrongdoing and doing that can take time, resources and can be easily manipulated.
However, with smart contracts that have automated consequences when a party fails to comply with contractual provisions, it becomes totally unnecessary for customers to go through stressful processes or even have to bring in third parties to settle the differences. Also, it reduces the time, resources and efforts required to make things right. More importantly, it levels the imbalance in power that exists between businesses and customers.
In conclusion, these are just some of the ways through which the blockchain technology has helped to improve traditional transactions and the list remains exhaustive.