mainArticlesHow to Use Blockchain Technology

How to Use Blockchain Technology

Aug 8, 2023
Reading Time 5 Min
author of ilink articles
Kate Z.
How to use blockchain technology | Read ilink blog

Blockchain Is a Powerful Tool for Securing Business

Besides recording and storing information about transactions and operations involving digital assets, the blockchain's decentralized database establishes ownership rights to those assets as well. Transactions are essentially transfers of funds, securities, property, or other items from one user to another. They are recorded in blocks. As each block is linked to the one before it, the chain of blocks is inextricable.

This openness and security of data are important to entrepreneurs in various fields as well as to the government. Because there has always been a problem of trust between people. And the problem is exacerbated when it also concerns large amounts of money. Blockchain technology for business has the potential to make business more accessible and efficient, as well as reduce costs and fraud. It is a powerful tool for securing business, automating it and even saving money. Virtually every industry can apply the technology for profitable production and control. There are many use cases of blockchain technology, from creating decentralized digital currencies to vote protection. One of the most promising cases of blockchain technology is its potential to revolutionize the way we store and share data.

Areas in Which Blockchain Is Applied

  • Insurance. The insurance industry is one of the areas in which trust is truly lacking. Neither policyholders nor insurers are comfortable with the loss of control over their personal information.

The problem of trust can be solved through smart contracts. In these contracts, both parties are bound by their obligations which are executed automatically upon execution of the pre-written script. Unlike traditional contracts, smart contracts cannot be forged or altered; they can guarantee customers that all contract clauses will be fulfilled and that compensation will be paid. Furthermore, the automatic execution of the contract facilitates the processing of claims and payments.

  • International payments. The reduction of transfer costs is one of the main advantages of using the technology in this area. Through blockchain technology, international transactions between individuals can be confirmed without the involvement of a centralized intermediary. As a result, users are able to save on currency conversion fees and transfer charges.

Additionally, the wide coverage of the audience, which previously had no opportunity to transfer money, is an important benefit. In Asia, Africa and South America, there are many people without access to banks and traditional financial services, but they do have smartphones. It is possible for them to send money to other countries when they have access to cryptocurrency wallets.

  • Trade Finance. Platforms for trade finance are changing the marketplace. As a result, they provide fast access to counterparties around the world. Platforms facilitate communication between them. This is the same unified, shared environment that has been missing for so long, complete with transparent and convenient interaction tools, including peer-to-peer messaging. In this way, businesses are able to communicate more easily with one another regardless of their location or region. Using blockchain technology, trade finance transactions can be streamlined and cross-border transactions can be simplified.

  • Anti-Money Laundering. Transactions on the blockchain are immutable and transparent. Cryptocurrency laundering is easier to detect than the laundering of cash through banks. It is also possible to keep an accurate record of the transactions entered into through smart contracts. By identifying and verifying users, it is possible to prevent money laundering.

  • Logistics. A wide range of improvements can be made to supply chains through new technologies. Deliveries can be tracked more efficiently and administrative costs can be reduced with blockchain technology. Those who have access to the supply chain can enter information about products' prices, locations, quality, certifications, dates of transactions, and other information necessary to help manage the chain more effectively. This information is available to everyone involved. The chances of cheating are almost nonexistent.

According to these actions, the entire delivery process is quicker and cheaper, since the volume of document flow is reduced. It results in financial savings for the company.

  • Real Estate. The use of technology in this area can facilitate the management of property or the ownership of land. Blockchain records the entire history of land transfers. The use of smart contracts facilitates the effective management of transactions related to purchases and sales.

Blockchain technology can also be used for the issuance of No Objection Certificates (NOCs) and other compliance certificates. The result will be a further improvement in openness and trust in the transaction process.

  • Media. In the media, widespread intellectual property theft and the need to eliminate intermediaries between content creators and end users have forced the adoption of new technologies.

It is likely that the structure of this industry will undergo substantial changes with the advent of blockchain technology. Content aggregators, platform providers, and royalty collection societies will not be able to deceive blockchain technology. As a result, copyright owners will gain market power.

The application of blockchain in the media will generate new revenue streams, improve their operational efficiency, reduce overall production costs, and create more personalized audio and video content.

  • Audit and accounting. It is expected that auditing activities will change as blockchain technology is increasingly adopted in this area. As a matter of fact, if the accounting is a priori reliable, there is no need for an intermediary. A profession will not disappear, but the focus of auditors' work will change.

The work of accountants will also change. Blockchain eliminates the need to reconcile settlements with external counterparties. It is not necessary for them to confirm the fact of the transaction. The accountant will only need to identify and classify the acquired/transferred assets and the corresponding income and expenses. The company will be able to obtain real-time information regarding the movements of any asset within the company. Blockchain technology will eliminate the need to wait for an accountant to process the primary document.

  • Information Security. The technology is used in cryptography to ensure the security of data transfers. Moreover, it prevents data tampering. By combining sequential hashing with cryptography in a decentralized structure, we can create a system that is virtually impossible to tamper with.

  • Data Storage. There is a place for data storage, but it should be noted that it is not the most rational solution. There is a certain amount of information contained in each block of the blockchain. The blockchain framework limits this amount. For example, you can store information in Bitcoin, but it has a 1MB limit, which is okay for transactions, but if you wish to store images or videos, it's better to find other solutions. Ethereum is also not an option. It is not free to upload data there. This process uses Ethereum gas, which costs money.

  • Internet of Things (IoT). The blockchain is a decentralized, traceable, and hack-resistant data structure that acts as a "factory of trust" for the authentication and security of devices. IoT data is influenced by blockchain throughout its lifecycle, including 1) device registration, 2) data traceability from the edge device to the gateway, and 3) secure data processing and transmission.

  • Healthcare. Blockchain technology has the potential to be a solution to many of the challenges faced by the healthcare industry. As an example, it is being used to control organ donation, the drug supply chain and combat counterfeiting. The system can also be used to advance clinical and biomedical research, remote patient monitoring, improved insurance and billing processes, and the analysis of medical data.

An Overview of How it Can Be Used by Government

  1. Identification and Data Management. Records can be easily managed and protected against fraud because the technology encrypts the data and duplicates and erroneous entries are not a problem.

The many nodes that keep a blockchain network running ensure the authenticity of information that is recorded on a blockchain. It is possible for nodes to serve as authorized entities or government agencies responsible for verifying and validating digital records, with each node being responsible for authenticating the data in order for the files to be used as official documents, however with a higher level of security.

  1. Voting. Using new information technologies to conduct open and objective voting is becoming increasingly important in a democratic digital society. Applying a voting system based on the use of blockchain technology ensures the fairness of voting. It is not possible to vote for the same candidate more than once and have multiple results in this system.

  2. Taxes. In the future, calculating and paying taxes would be relatively easy with sufficient information in the blockchain. The system will be very simple and traceable if, for example, wages, expenses, and so forth can be automatically recorded and therefore taxes can be automatically collected. The result is an elimination of human error and a significant reduction in administrative costs.

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