The concept of blockchain has been going on in the field of technology for quite some time. Though blockchain technology appears to be complicated, the core concept behind it is pretty understandable. A blockchain is typically a type of database.
Like every other database, blockchain is also used to store data and information electronically. But the primary difference between the usual database and blockchain is the way the data is structured. A normal database stores data in the form of tables with entries. Whilst blockchain collects and stores data and information as a group. These groups are known as blocks.
Each of these blocks in the blockchain has a certain storage capacity. Once these capacities reach the limit, the current block is chained up with the previous block. Every block in the blockchain network has its hash and the hash of the previous block. Hash is the way of encrypting data by converting digital information into a set of strings and numbers. Every newly created block is chained up with the previous block once its capacity is reached. This is basically how a blockchain network is formed.
Moreover, blockchain is a decentralized, distributed ledger technology. This means that there is no ownership over the data and information on the blockchain network. With the help of distributed ledger technology (DLT), the data can be shared within the blockchain network. Once the data has been entered into the blockchain, it becomes immutable. That is, no one can alter or edit the data after it has been inserted into the blockchain. Additionally, blockchain also provides data transparency by making the data traceable over the blockchain network.
Market size and growth rate of the blockchain (2020-2025)
The global blockchain market is expected to reach $39.7 billion by 2025 with a compound annual growth rate of 67.3% between 2020 and 2025.
Meanwhile, by the end of 2024, companies are expected to spend $20 billion on each blockchain-based service.
Categorizing the industrial sector by the size of organizations, the SME segment is predicted to grow at the highest rate during the forecast period. That is, between 2020 and 2025.
While categorizing the industrial sector based on the application of blockchain technology, the financial and banking sector contributes majorly towards the growth of the global blockchain market during the forecast period.
Future scope and application of blockchain technology in various sectors
According to Statista, the value of the global blockchain market in the food and agriculture sector is forecasted to reach about $1.4 billion by 2028.
From cryptocurrencies, blockchain has widened its scope of applications across various sectors such as banking and finance, healthcare, smart contracts, supply chain, etc…
Blockchain in banking and financial sectors
The financial and banking sectors are expected to be the two most major contributors to the growth of blockchain in the near future. Implementing blockchain technology in the financial and banking sectors can be beneficial in reducing transaction costs, fraud detection, trading and payments.
Almost all the banks today are built on centralized databases. A centralized database is highly prone to cyberattacks as the hacker can have complete control over the data on the database once the barrier-level security has been breached. Blockchain technology using cryptography makes it impossible for the hacker to enter into the system. Additionally, to access one single block of the network, the entire chain of blocks has to be accessed.
When it comes to trading, a lot of paperwork is involved. Such as a letter of credit that has to be sent through fax or posts to the involved parties, regardless of their locations. So, when multiple parties have to access the same information, blockchain becomes the obvious solution.
Banks function only 5 days a week and anyone who needs to transfer money on weekends has to wait till the start of next week. Sometimes, the transaction process may be delayed or even fail at times. The usage of blockchain for payment transactions not only ensures a fast transaction but also keeps the record of transactions with the timestamp.
Blockchain in Healthcare sector
The Healthcare sector deals with so much sensitive information on a daily basis. Hence it becomes very important to secure those data. With blockchain technology, the generated medical record can be digitally signed and written into the blockchain, after which the patient can be provided with a proof of concept (POC) that the record will remain unaltered.
These medical records can be encrypted and stored in the blockchain network with a unique key or a private key. This ensures privacy by allowing only the members who have the key to access the data.
Blockchain in Smart contracts
Smart contracts are blocks of code that can be written into the blockchain to validate and verify an agreement. The program will be executed only when the given conditions are satisfied. Smart contracts eradicate the need to draw up a bunch of paperwork and the need for a third party to validate the agreement.
Blockchain in supply chain management
Today’s world is moving towards a fast-paced lifestyle. The demand for products and services is exponentially increasing. To keep up with the demand vs supply requirements, companies had to improve the speeds of their business processes. Especially in the supply chain area. Blockchain technology has greatly helped companies in achieving this.
Manual processes that depend on paper tend to consume a lot of time. This mostly happens in the shipping industry. These processes can be replaced by blockchain technology to reduce the time consumed.
Using blockchain, the traceability of the product can be increased. That is, organizations can create a decentralized record of all transactions to track the products from production to delivery or the customer.
Limitations of blockchain technology
Blockchain technology has brought in various positive impacts in the field of technology. But there are still some limitations to adopting this technology.
Cost and implementation
The initial cost of implementing blockchain technology is massive. There are open-source blockchain solutions available, but to implement this technology it is essential to hire developers and other experts to develop and maintain. Paid blockchain solutions have to be licensed.
Typically, an enterprise-level blockchain solution could cost around a million dollars.
Expertise in the field
As mentioned earlier, a blockchain system needs to be properly maintained. People who have plenty of experience and knowledge in this area have to be hired. Only then the existing employees of a company or an enterprise have to be able to understand the complexities behind how the system works.
The number of transactions a blockchain network can process is limited by a consensus mechanism. This mechanism requires every node in the process to verify the transaction. This does not support blockchain-based applications with large volumes of transactions. One of the well-known applications of blockchain in cryptocurrency is bitcoin. Currently, bitcoin is limited to 7 transactions per second.
The data becomes immutable once it has been entered into the blockchain network. That is, it is not possible to edit or alter the data after the data has been entered. Though this is considered to be an advantage for various reasons, it still has its drawbacks.
If the data has been wrongly entered or if it needs to be altered, it becomes practically impossible to do so.
Major players in the field of blockchain technology
Consensys, a blockchain company, develops enterprise-level blockchain applications and developer tools that are secure and efficient. The company also supports blockchain startups by investing alongside them.
2) Blockchain Intelligence Group
Blockchain Intelligence Group is one of the most trusted blockchain companies in the world. The company provides consulting services on building blockchain applications. The company also aims in providing optimum solutions for reducing the risk involved in cryptocurrency transactions.
Blockchangers is one of the most prominent blockchain companies that has dominated their presence in the IT sector. The company provides consulting services on blockchain-based project ideas and assists the clients to understand and leverage the benefits of blockchain. The company also provides lectures, workshops and development services to the clients.
Top 10 sites to learn blockchain technology
There are many students and people who are enthusiastic about the blockchain field. Many online courses are offered by experts and professionals in this field. The 10 most rated websites are:
- IBM cognitive class platform
- B9 lab academy
- Khan Academy
- Class central
Career scope in the blockchain sector
The blockchain sector has been exponentially growing in almost all fields. The blockchain sector also offers unlimited career opportunities as there is an increasing demand for experts in this field. Some of the job roles that the blockchain sector offers are,
- Blockchain developer
- Blockchain solution architect
- Blockchain project manager
- Blockchain UX designer
- Blockchain quality engineer
- Blockchain legal consultant
Experts Insights on blockchain technology
Many experts and leaders in the field of blockchain technology have shared their insights on this technology. Out of which, a few of those are mentioned below.
1) Benjamin Dynkin, a cybersecurity attorney in NYC, anticipates that blockchain technology is the solution to eliminate the need for trust in transactions.
2) Kyle Therriault, executive vice president at Auto Accessories Garage, pointed that blockchain technology will assist in bringing self-driving cars to the market. Though these self-driving cars have passed the test runs, there will be issues related to self-driving vehicles for cybersecurity-related reasons. With blockchain, complete security is provided against cyberattacks.
3) John Zanni, President of Acronis, predicted during the initial stages of blockchain development that it could potentially address all of the modern-day security concerns like identity and fraud detection. Blockchain will also help online business vendors and financial organizations to fight against cybercrime.
Several years of research and development of blockchain technology have finally paid off for good. Many practical solutions based on blockchain technology are being developed and deployed these days. In the upcoming years, blockchain technology would make business as well as government processes more efficient, accurate, secure and cost-efficient with very less or no involvement of third parties.