Blockchain-beyond-cryptocurrency-nordic-apisIn many ways, the internet is still a “wild west” technological landscape. New, innovative technologies emerge yearly, promising to expand functionality and redefine interactivity, changing our day to day lives on the world wide web through huge paradigm shifts.

One of these great new technologies ushering in the new era of computing is the concept and application of the Blockchain. While many immediately append topics like cryptocurrency to the idea of the Blockchain, emergent studies and experiments have suggested that this technology will be at the forefront of some surprising industries in the new era.

Today, we’re going to discuss the Blockchain concept and its applications beyond cryptocurrency. We’ll look at both potential use cases, and real life tests that have proven the viability of this new technology.

What is a Blockchain?

Blockchain is often misunderstood. You can’t really discuss the blockchain without discussing cryptocurrency, and, more to the point, cryptocurrency is perhaps the best example of just why this technology is so powerful.

Everyone has, at one point or another, lost their keys. Imagine, if you will, walking into a room, setting down your keys, and then walking away. Now imagine that there are hundreds, possibly thousands of people who watched you from the moment you walked into the room to the moment you set down the key, and every single one of those people wrote down a 100% true, authentic report of this movement.

This is the blockchain, a digitally generated record of events shared between a multitude of sources, updated only with the consensus of these sources, and individually managed and stored by each individual source.

Blockchains are currently applied with cryptocurrency. Currency, of course, is simple dollars and cents, but in the real world, these funds are backed by promises from banks or from physical sources of wealth like gold or silver.

For popular digital currencies such as Bitcoin, Litecoin, Ripple, or Darkcoin, however, there is no such physical backing, so there needs to be an agreement on the value of the currency and a tracking system to define its status. The value itself is generated via mathematical algorithms beyond the purview of this article.

Illustration by Matthäus Wander (Wikimedia)

Illustration by Matthäus Wander (Wikimedia)

The tracking system, however, is a key example of the power of the blockchain. By keeping a record of the generation time and source of each unit of cryptocurrency in the rolling blockchain and adding to this chain with each transaction, a paper trail of sorts is created, allowing for testing of data integrity and tracking of activity.

This is what makes the cryptocurrency system work — a tacit agreement to track fund sources, terminations, and transactions, and to verify these exchanges at each step.

The blockchain is not just limited to cryptocurrency, though — that same verification can be applied to a wide range of functions and systems, as the same benefits granted to cryptocurrency (integrity, tracking, verification) are just as beneficial in non-currency transactions. These benefits grant not only amazing uptime given the distributed nature of the blockchain network, but a more secure system in the face of an ever-increasingly insecure and dangerous network ecosystem.

Other Applications

While cryptocurrency might be controversial, the technology behind it isn’t. Though total strangers exchange detailed records of exchanges, generations, and terminations, the meshed network of accounts is trusted and verified — a simply staggering reality. These qualities are even more impressive when you factor in the lack of a central authority, which is often needed in systems that require trust between untrusting sources.

That “trust between untrusting sources” is the key to why blockchain is such an important concept. Allowing disconnected people with no reason to trust one another the ability to fully trust the documentation, transfer, verification, and integrity of data between each other without passing through a central trusted authority is incredibly important and powerful.

Let’s look at some amazing applications for blockchain technology, and how they can directly impact the modern consumer.

Smart Contracts

blockchain-smart-contracts-nordic-apisIndustry and commerce relies heavily on contracts. The ability to not only submit and sign contracts, but to trust them, verify their integrity, and track their sharing and transfer is key to the trust professionals must share in order to function in their industry.

Until this point, much of this trust was simply implicit (either implicit on the signatories or on the providers who verified the signatory contributions) or based on personal, lengthy review. Constant review, discussion, and verification is needed in order to verify the status of agreements.

Not so with blockchains. When every transaction is tracked, every interaction noted and appended to the transaction list, trust is no longer implicit, but proven. As the transfer chain is documented and proven, parties can be verified, their signatures provably affixed, and their interactions chained together to form a paper trail.

This can be seen in active application under the concept of SmartContract. SmartContract is a service that allows providers to create contracts that tie into payment methodologies, outside trackers, and even internal IT resources utilizing a verified and secured blockchain method.

By doing so, transactions and interactions can be tracked and verified, even if those actions are outside of the blockchain, thereby constantly monitoring and updating the current status.

Scott Manuel, Vice President and Head of Product Management for Thompson Reuters (of Reuters news fame), perhaps says it best when he summarizes:

“Our legal customers … are very excited about the potential of smart contracts, what can smart contracts do, what can they allow in the blockchain world. As most of our legal customers also do legal work with financial services, those clients are all interested in how blockchain can apply.”

To take this functionality even further, when actions move from the physical to the digital, these actions can be increased in amount and decreased in importance, while still being tracked effectively. More simply put, imagine trying to share a property between 50 people, each making micropayments every hour. At a certain point, an entire staff would be required just to handle the paper trail!

Marc Andreessen of the New York Times stated:

Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.

While he is directly addressing the benefit of Bitcoin, these benefits have obvious and beneficial carry over to all types of property transfer, whether real or monetary. With blockchain, smart property, micropayments, and distributed exchanges are all made possible in a system that is self-documenting, self-managing, and self-secure.

Medical Records

blockchain-healthcare-nordic-apisThe medical applications of the blockchain isn’t a theoretical — it’s an application that has already proven itself.

MedVault, a blockchain based medical record storage service that was a proof of concept Hackathon entrant, is a project that uses blockchain to store and anonymize records utilizing the Colu engine.

Under their development plan, the average patient would utilize QR codes containing their public key in order to access medical records. These records would be stored globally on a balanced BitTorrent network, splitting data demands across all users of the service, and bringing these records together after verification generated utilizing the blockchain key.

Once the user is identified, the blockchain notes their access, type of request, records accessed, and treatment, if any. This tracking not only allows for appended notes to the medical record, but allows medical providers to see trends over time, improving treatments, identifying warning signs, and increasing understanding.

All this while the actual medical records are anonymized, privatized, and distributed over a global network, reducing the data load on devices and transferring physical, locked records to sanitized, digital records.

Of key interest in this topic is the fact that tracking in the blockchain establishes a chain of custody, something legally important and often required in medical settings. By establishing a path between patient and provider, this chain of custody can ensure not only the quality of medical care provided is heightened, but the security of the patient is respected in an era of high-quality and high-flow data breaches.

What’s more, the communication between signers is stamped using an encrypted method called SHA–256, a type of encrpytion that rivals even the most effective peer-to-peer encryption method.

Voting and Benefits

voting-blockchain-nordic-apisThe applications of the blockchain aren’t just limited to business, either. There are a ton of applications for the blockchain in the context of government activities, not the least of which is voting.

Voting is a risky venture. When a vote is registered, many checks have to be run to ensure the integrity of that vote. The voter needs to be identified, there needs to be a check to make sure they haven’t already voted, their data needs to match the data on the voter card, and so much more.

Failing even one of these checks results in a vote that is questionable, and often requires ejection (but may not be ejected for a variety of reasons). Elections across the world are fraught with votes from dead voters, multiple votes from a single voter, and even votes in district and countries where people are not registered to vote.

Implementing the blockchain in these situations is a powerful way to ensure the integrity of a vote, and to ensure the data submitted is true and verified.

This, like medical records, is not a theoretical — electronic voting is already the standard in Estonia, where each citizen is given an identification card and unique identifiers. Although this electronic voting does not tie into the blockchain as of yet, the functionality is as it would be in such a system.

In much the same vein, government benefitsl can be managed using the same system. Preventing double payments, fraudulent welfare claims, and tracking prohibited usage of benefits can be done utilizing the blockchain, both to prevent waste and to ensure that nobody but the intended recipient uses the benefits allocated.

Unpredictable Applications

blockchain-general-lock-nordic-apisPart of the difficulty people have considering the uses of the blockchain is the fact that the technology is so new, and like any new technology, the uses are limited only to our imagination.

Consider the relational database in the early days of computer programming. While early applications predictably focused on the simple and obvious applications, over time, more experimental and exponentially complicated uses made themselves obvious, and the relational database quickly turned from a simple tool to a powerful framework.

As the blockchain is incorporated into more and more services, it will be harder and harder to conceptualize just what the maximum saturation will look like, and in turn, the multitude of uses this will entail.

Indirect uses of this technology can range from simple (such as verification of credit card payment) to complex (creating a single user ID that can be tied to a registered fingerprint, allowing drivers to scan a car to start rather than turn a key over).

Consider the monitor. When television screens and computer monitor technologies were first developed, who would have thought that, in the year 2016, two micro versions of screens with high-resolution would be used in a headset with various sensors surrounding the user to simulate virtual reality? Who would have considered the application of these monitors into flat screens that span the length of Times Square in New York, displaying advertisements?

The fact of the matter is that we don’t know all the applications of the blockchain yet because it is just so powerful and so new.

Implementation Example – Colu Engine

colu-engine-blockchainLet’s take a look at a sample implementation of the Blockchain, specifically utilizing the aforementioned Colu Engine. Utilizing the engine is rather simple, and is well documented by the authors at Colu.

After initial setup, the blockchain needs to be initialized — that is, a wallet needs to have a “seed”, a private wallet key, generated to allow for transaction tracking in the blockchain. The following code does this:

Once this is done, a key will be returned that must then be entered into the system variables for the server in question. With a key, we can begin to “issue assets”. Assets are how Colu organizes the blockchain, assigning an asset issuance for tracking purposes. This can be done using the following code:

Invoking the asset is similarly simple:

Once this asset has been created and issued, the blockchain is working! This is part of why Colu is so powerful. By depending on an asset model rather than a configuration model, assets can be issued for the blockchain incredibly easy.

This ease of issuance also has the wonderful effect of allowing the blockchain to be added to pretty much anything. An asset can be any variable, whether it is projects, signatories on a contract, or even file transfers — regardless of what the item is, it can be attached to an asset and tracked.

When these assets are called, they show their transaction history, their asset data, and so forth. The asset can be manipulated in other ways, limiting the number of transactions and so forth, with the example provided here being the simplest.

The Bright Future

The blockchain is a promising concept, and is already showing huge benefits to early adopters. As the technology is developed, expanded upon, and experimented with, it will quickly move from the realm of “possibility” to “actuality”.

Understanding the blockchain now (and perhaps considering its integration) could go a long way towards making for a better service, a more complete functionality, and perhaps a better experience for end users.

Kristopher Sandoval

Kristopher is a web developer and author who writes on security and business. He has been writing articles for Nordic APIs since 2015.