Top 10 Problems that Blockchain Solves

Blockchain technology is still quite new. However, it has already

penetrated a wide range of industries on a global level. It can

potentially change the way any digital data is processed in the nearest

future. As per the top blockchain development companies, this

technology can solve some most complicated problems the world is

dealing with right now. In this article, you will get an overview of the

top ten issues blockchain can deal with.

1. Data Storage

The times when knowledge was available only to the chosen ones are

long gone. In the digital age, it is much harder to cut yourself off the

non-stop information stream than getting the information you need.

With the emergence of Facebook, the development of artificial

intelligence and machine learning, the amount of information that

needs to be stored is continuously growing.

Big Data challenges the capacities of modern data centers significantly.

As the technologies mentioned above develop further, the data storage

situation gets tougher. IDC predicts that the world will have 163

zettabytes of data to store by 2025. Current cloud storage services do

not have the potential to deal with such vast amounts of information

effectively.

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Blockchain can potentially solve the data storage issue thanks to its

decentralized and distributed nature. To store the data in the

blockchain, one will need to break it in small parts. Every part will be

encrypted and uploaded to the blockchain. Next, the data will be

distributed in a way that will allow accessing all of it even in case a part

of a network does not function. Such data handling can serve as a much

better alternative to cloud storage.

2. Data Security

Storing data in blockchain will bring vast improvement to data security.

Currently, the cloud data is stored in centralized storage units, which

makes it sensitive to any security breach. Blockchain can enhance the

safety and speed of cloud storage. The data, stored in the blockchain,

will be stored across the nod network. There will be no need to rely on

a central entity or location in this case. Any data attack will not be

potentially fatal in the blockchain storage. There will be no way to

tamper or steal the data, stored in the blockchain.

Storing data in the blockchain will secure it from force-majeure

circumstances that damage and destroy centralized databases at

present (e.g., natural disasters, riots, political escalation). A distributed

blockchain data storage network will store redundant copies of data

among different nodes so that there is no data downtime and loss no

matter what. Blockchain has the potential to store, process, and

manage data without the need to rely on any third party.

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3. Transactions

Currently, most of the payments in nearly every industry are made via a

third-party financial institution. Blockchain payments can improve the

efficiency of payment procedures for many businesses. For example,

when a company enables a blockchain-based payment processor, it will

get rid of the payment delays and the time-consuming procedures of

the outdated payment system. With blockchain, instant, secure

transactions can be an affordable alternative for many businesses.

The structure of blockchain enables a real-time audit for all the

transactions, securing them from any modifications. It can potentially

enhance the operation of many compliance-intensive industries.

Businesses can use smart contracts (applications that run precisely as

programmed without allowing any third-party intervention, fraud or

downtime) to establish unbreakable regulations for their financial

transactions.

For instance, Slock, an IoT platform that works with Ethereum, uses

smart contracts software for a bike rental service. When both parties

agree on the terms of the contract, a smart lock unlocks on the bike,

and a user can ride it.

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4. Intermediaries

Conventional financial transactions are impossible without

intermediaries like banks. Banks are middlemen that make sure that

the money you transfer will get to the predetermined recipient.

However, banks do not show you how the transactions happen, and

after you hand the money to the bank, all you can do is wait until the

recipient receives it. Blockchain gives you an opportunity to trust your

finances to secure technology instead of banks.

With blockchain, it is possible to avoid middlemen in many cases. One

can send their digital payments from their virtual wallet to a recipient’s

virtual wallet with the help of a set of digital keys. To perform such a

transaction, one needs to know a public address of a recipient’s Bitcoin

wallet. Such transactions are quick, secure and irreversible, which

makes them more advanced than habitual bank transfers.

What’s more, blockchain transaction fees are currently much lower

than bank fees. Even in cases when intermediaries are needed, holding

transactions via blockchain will help businesses and individuals

eliminate fraud and secure all the transactions.

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5. Supply Chains

Nowadays, supply and logistics chain management is extremely

complex. Some products undergo dozens or even hundreds of steps in

their supply chain journey. Processing all the invoices, payments,

logistics and tax documents take a lot of time and resources. Because of

this, the supply of some products can stretch to months and even

years. Somewhere along the process, errors, fraud, and force-majeure

circumstances can lead to high losses. Long supply chains can lead to

more potential losses for all the sides of the deal.

Blockchain technology is seen as one of the most promising

technologies for supply-chain management. It can improve assets

recording, tracking, assigning, linking and sharing greatly. Blockchain

can facilitate the efficiency of supply chains significantly because it

offers excellent security and transparency of the transactions.

Blockchain can help document the supply chain journey of every

product for better protection and transparency of every step.

Blockchain can replace traditional trade processes and transform trade

procedures.With the help of blockchain, illegal and unethical practices

can be eliminated from the supply chains on the worldwide level.

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6. Intellectual Property

Owners of intellectual property all over the world find it hard to protect

their rights in the digital age. It seems like almost any work of art can be

stolen, copied and distributed by pirates. However, some companies

have already found a solution to this issue with the help of blockchain

technology.

For example, Binded created a website that helps artists protect their

original images by saving them to the blockchain. This way, an artist

receives a certificate that proves that the picture is authentic. However,

such a certificate is not a substitute for a certificate at the US copyright

office. If an artist wants to win any statutory damages in a lawsuit

within the US, they would still need to comply with the formalities.

Speaking of any forms of intellectual property, be it an invention, a

trade secret, or a song you’ve written, blockchain can help secure it

from theft. With blockchain, one can create a digital trail of records of

their innovation process. One can quickly obtain blockchain certificates

to prove their ownership over the existence and integrity of an IP asset

they own.

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7. Government Operations

Unfortunately, there is no perfect government in the world, that is a

hundred percent faultless, corruption-free, and just. The adoption of

blockchain technology can help to facilitate the delivery of public and

government services greatly. The major pain points that blockchain can

deal with are elections, identity management, and taxes.

Currently, the standards of identity management are different across

the world. It makes the identification process long, inconvenient and

vulnerable. A combination of biometric technology and blockchain can

replace the outdated identity management system. It will make

participating in elections, receiving government benefits, and traveling

a lot easier.

Blockchain can make the taxation systems more efficient by

automatically checking tax records for fraud. Currently, the US

government loses millions of dollars to tax fraud annually. By

implementing blockchain solutions, the government will make sure that

no tax record can be hacked and changed.

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8. Charity

Current social funding and charity model does not have credibility

among the majority of people. Millions of dollars get wasted on

ineffective projects in social funding. Little transparency makes more

and more people suspect the reliability of different charities. What’s

more, some useful social projects never get to scale because they

struggle to get enough visibility. Blockchain can be the answer the

sector is looking for.

Blockchain can transform the charity sector significantly. First of all, it

can boost the trust of the population by making the donations

transparent. Next, it can reduce the transaction costs and other

expenses for all sides of the deal. What’s more, blockchain technology

can reduce administration costs by checking most of the processes and

approving transactions automatically.

For example, Alice is a platform that brings transparency to social

funding through blockchain technology. This project incentivizes social

organizations to run their projects transparently and make the

performance of each of their projects available for the general

audience.

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9. Voting

One of the greatest issues for many countries is the justice of

elections. There are many cases of voting machine hacks, voting

miscounts and forced voting. A blockchain-based voting system has

the potential to eliminate all these issues. When a vote is saved in

the blockchain, it can be tracked in real time, and it can never be

changed. This technology can eliminate the possibility of tampering

any election. This way, election winners can be determined most

effectively.

One more issue of elections is voter anonymity. By enabling

blockchain-based voting solutions, the government will protect the

anonymity of the voter with the transparent crypto algorithms.

Complex mathematical algorithms will encrypt every vote and save

it to the blockchain, without leaving a chance to change it or hack

it. With blockchain, only citizens who are legally allowed to vote

will be able to fulfill their civic duty.

Colombia has already made the first steps by launching a

blockchain-powered voting platform Plebiscito Digital. This service

has previously worked with the civil society organizations to give

Colombian citizens living abroad an opportunity to vote remotely

using the blockchain-powered service.

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10. Crowdfunding

A traditional crowdfunding model leaves much to be desired. It is

slowly improving, but there are still significant issues it cannot

overcome. With platforms like Kickstarter, Crowdfunder, and

Indiegogo, startup projects all over the world received visibility they

dreamt of. However, over three-fourths of all the projects do not reach

their target goals. What’s more, less than two percent of the raised

funds go to the countries with the developing economy. It all means

that the current crowdfunding model needs to be changed in the

nearest future.

Blockchain can make the funding processes accessible from anywhere

around the world, transparent, and highly secure. With this technology,

the success of the project can be maximized. What’s more,

blockchain-powered crowdfunding can be more democratic, as it will

be anonymous, secure, and free of borders. Blockchain can boost the

creation of a global crowdfunding tool that can be accessed by anyone

around the world easily. It will make all-inclusive crowdfunding

possible.

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Final Thoughts

Seems like blockchain technology has a promising future in many

industries. Even though many skeptics do not believe that blockchain

needs to penetrate some sectors and that it cannot improve their

efficiency, many experts think that the future belongs to the

blockchain.

One thing is certain now: blockchain has the potential to solve the

acute issues of data storage and security, transactions processing and

intermediaries, supply chains, intellectual property, government

operations, charity, voting, and crowdfunding. Some experts say that

the implementation of blockchain in these spheres will have such a

dramatic effect as the invention of the Internet once had. People didn’t

realize how inefficient they were until technology took them to the

next level.

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