In 2018, the Department of Health and Human Services’ Office for Civil Rights claims that breaches at hospitals resulted in the exposure of 13 million healthcare records (“Largest Healthcare Data Breaches of 2018”). Another alarming statistic from the National Highway Traffic Safety Administration, shows that over 450,000 vehicles are sold each year with false odometer readings, costing American car buyers more than $1 billion annually (“Odometer Fraud”). So what do things such as a data breach and odometer fraud have in common? They, along with other problems in our economy and the world, have the same solution: Blockchain Technology.
Data Security and Blockchain
The foundations on which blockchains are built makes it virtually impossible and highly unlikely to be hacked or tampered with. The reasons are:
- the hash system
- the proof-of-work system.
Before a block is added to a blockchain, it is assigned a hash - a unique, identifying code. In addition, it is also given the hash of the block before it in the blockchain. Each succeeding block will contain the hash of the previous block as well as its own. Therefore, if a hacker tries to tamper with the block, it’s hash will change and it will no longer be accepted by the rest of the network since the next block in the chain will contain the old hash. The hacker would need to update the hash of each succeeding block, including the new ones being continually added. Recalculating those hashes would take an improbable amount of computer
Power.
Furthermore, the proof of work system adds another layer of security. In order to join the blockchain network, computers must “prove” they have done the “work” by solving a complex math problem. However, to solve the complex math problem (the odds of solving one is placed at 1 in 5.8 trillion as of February 2019) the computer must run programs that cost significant amounts of money. Similarly, the hacker must also try to solve this complex math problem with a 1 in 5.8 trillion odds to coordinate an attack on the blockchain. At that point, the costs outweigh the benefits.
With blockchain technology being one of the most secure ways to store data, it is easy to see why many see it as the future in many of the following industries: banking, lending, medical, car, and the food industry.
Blockchain in Banking
Banking, worldwide, is likely the industry that will benefit the most by integrating blockchain into its business. Currently, most financial institutions take one to three business days to verify transactions due to the vast volume of incoming transactions and the process of bypassing a complex system of intermediaries before it reaches its destination bank account. In addition, most banks only operate and approve transactions during business hours - meaning Monday through Friday 9 a.m. to 6 p.m. However, since blockchain is operated by computers, it can operate twenty-four-seven, seven-days-a-week. For the consumer, the integration of blockchain into banking would allow their transactions to be completed in as little as ten minutes. In addition to the faster clearing of transactions, blockchain also reduces the margin of error since each transaction is verified by a community of blockchain network users. For banks, this technology can save them billions yearly due to the elimination of slow and expensive payment networks. Santander, a European bank, believes that by the year 2022, the infrastructural cost for banks could be reduced by fifteen to twenty billion dollars a year (Perez,
2015).
Blockchain in the Lending Industry
Without the need for a middle man, blockchain technology can make securing loans more secure and provide it at a lower interest rate. Currently, banks and lenders decide on loan amounts based on credit scores. They access one’s information from the credit agencies and look into one’s credit score, home ownership status, and debt-to-income ratio. They then
determine the risk of the person not paying back the loans and factor that into the fees and interest rates. However, according to the Federal Trade Commission, one in five Americans have a potential material error in their credit score that prevents them from receiving a loan.
Blockchain, on the other hand, offers a more efficient and cheaper way of obtaining loans through its direct peer-to-peer loans. It can approximate mortgages and quicken the loan process. Without big intermediaries like banks or lenders, interest rates can potentially be a lot lower for the borrower as well.
Blockchain in Healthcare
As previously stated, in 2018 alone, data breaches and hacks led to the exposure of over 13 million health records. In the future, health records can become much more secure if integrated into blockchain technology. Since blockchain mainly is a digitized storage ledger, its uses are not only limited to money. Patient records, once generated and signed, could be stored in blockchain, with a private key. This way only the patient and their doctor can access the records and the patient would not have to worry about losing their records. With blockchain’s immutability, patient records can also remain secure from cyber attacks and patients can have
the confidence that their records cannot be changed.
Blockchain in the Auto Industry
Odometer fraud has grown significantly in recent years. In fact, as previously stated, the NHTSA states the fraud is costing American car buyers $1 billion annually. Odometer fraud occurs when the car owner changes the mileage of a car to make it look newer and worth more money. However replacing the regular odometers with smart odometers connected to
blockchain technology could prevent this. The smart odometer would create a secure, digital certificate for each car with data such as its mileage. Once added to the blockchain, the odometer readings cannot be tampered with. This technology is currently being tested in Bosch’s Internet of Things (IoT) lab and if perfected, could possibly be used in the future by car Manufacturers.
Blockchain in the Food Industry
Blockchain could store data starting with a produce’s harvest to its sales to a consumer.A digital certificate could be created for each piece of produce indicating where it came from, the different places it had been to (such as factories, delivery services, stores, etc.) and who the product had been sold to. This way, if there is food contamination or an outbreak, it can be traced back to its very source and everyone who purchased from that particular batch can be specifically notified of the outbreak in a more timely manner. Millions die from food contamination outbreaks every year, but with the integration of blockchain, most could be prevented in the future. Companies such as Walmart and IBM are already testing the use of blockchain in the food industry. They were able to track a batch of mangoes in 2 seconds, compared to the days it normally takes to track batches of produce. Both the producers, with the lower costs from reduced amount of lost packages, and the consumers, with prevention from food-borne illnesses, can benefit with the incorporation of this technology in the food industry.
Blockchain and Globalization
It is important to note that blockchain technology is not just groundbreaking for the tech and service world but also for our increasingly interconnected globalized future. For starters, blockchain technology can get rid of the need for middleman such as Amazon or Ebay. So in the future, people could purchase products directly from the producer and the packages could be tracked using blockchain as well. It would be much more secure and make global trading much more efficient.
Takeaway
In conclusion, the accessibility, immutability, and security of blockchain makes it a very attractive option for a multitude of industries across the world. The examples above are just a few of the many fields in which blockchain can be used to change the world as we know it.
Blockchain technology will redefine the workplace, change our economy and make the world more globalized in the next ten to twenty years.
Top comments (0)