5 Points how Blockchain will change our lives in a revolutionary way

The pioneering database-technology blockchain exceeds the limits of the financial industry. Preventing prescription fraud, charging e-cars, even marrying – everything is now possible via blockchain. We present you 5 everyday fields into which blockchain will find its way and have a look at how it differs from classical software.

What exactly is blockchain?

Blockchain is a new technique to save data and enables secure management of information of all kinds. Its origin lies in the internet currency bitcoin, with which money values can be transferred without a central bank authority. Fundamental units of blockchain are the transactions, where two parties exchange information.

Subsequently, the data is verified and validated, whereby it is reviewed whether one party owns the respective rights for these transactions. Then follows the mining, where after a certain amount of time, the transactions are combined to blocks and thereover a hash value is generated. Afterwards the blocks are attached to the chain and distributed via a peer-to-peer network.

Figure 1: Traditional database versus Blockchain

 

Blockchain is able to run the code independently

In principle, blockchain applications are able to run codes. The first blockchains implemented very simple operations, like for example the setting of a token. Meanwhile, established coding languages are used in order to perform the complex computations of hash-values, the so-called mining. In many cases the code is not running in an isolated way, but is part of a bigger application software.

Moreover, blockchain differs from classical software. The software is recorded by the blockchain itself. If the software is executed, it cannot be interrupted by anybody or disturbed in any other way. This technique makes sure that the content of contracts is fully implemented.

  1. Smart contracts in real-time

Probably the most famous and promising application of blockchains are smart contracts. Smart contracts are a new form of contract. They are web-based computer protocols which map contracts and technically support the settlement of a contract. Computer algorithms determine which circumstances lead to which decision. Convenient with this automatised settlement of contracts is the fact that no solicitors or lawyers are needed to draw up or execute, and thereby expenses are saved.

The algorithms could, for example, control contracts in real-time and enforce rights of the contracting parties automatically. Thereby the human factor is excluded as a source of error. Furthermore, the profession of bailiffs is in danger. If a customer, for example, doesn’t pay the instalment for their car, access to the vehicle can be automatically blocked.

Smart contracts are useful especially due to the fact that in these contracts, several parties can be included who do not trust each other a hundred percent. The compliance of contracts happens fully automatically – including their surveillance. In many contracts clauses are integrated intentionally in order to control the course of the contract.

In conventional contracts the adherence to clauses has to be controlled manually. If the according person is, for example, on holidays or ill, the implementation is delayed for the respective time span. Through the usage of smart contracts, the operational risk of the contracting parties can be reduced enormously and the procedure happens in an automatised and reliable way.

Figure 2: Smart contract in real-time

 

  1. Transparent auctions

In June 2016, the world’s first blockchain based auction took place in the Ukraine after a three-month preparation time, where government-issued licences were sold. The Microsoft Azure Cloud Services served as platform for technical support. The aim of the government-backed initiative is to enable tenderers from all regions of the Ukraine and abroad to participate in the auction.

Due to safety reasons of blockchain, no third party can take control of the system, which leads to a safe auction process. Moreover, all transactions happen transparently – there are no closed doors at these auctions, all information is publicly accessible and visible for everyone. It can be expected that blockchain based auctions will prove successful on a worldwide level and become prevalent.

  1. Marrying via QR-Code

There are further interesting fields of application for the blockchain technology. In the USA it is already possible to marry via blockchain. In October 2014 Joyce and David Mondrus were the first couple that was married via Blockchain. In principle, any arbitrary information can be saved in a blockchain – in this case it was the marriage.

The ceremony was held via Skype. To be in conformity with the law, the couple had to scan and confirm a QR-Code, which was written directly into the blockchain database. In this way it is even possible to marry anonymously – without knowing or ever having the seen one another. Time will tell whether many couples will prefer this service over a “real” marriage.

  1. Revolution in electric mobility

An interesting cooperation was established by Slock.it and RWE in order to use the bitcoin version Ethereum for payment at charging points for e-cars. Per blockchain technology, the companies want to create a consistent and economic payment system which is independent from cashiers, coin slots or card slots that are prone to vandalism.

Behind the cooperation is the vision to revolutionise the distribution of electricity for cars – RWE for example imagines to charge e-cars via induction while they wait at red traffic lights. This way, stationary charging in citys will be completely redundant. Payment of the small sums of money for electricity takes place via the economic Ethereum.

  1. Perpetual elections for more democracy

Another keyword for the usage of the blockchain technology is “democracy 2.0”. This means that elections can take place via blockchain, also in order to increase the general voter participation. Through the usage of blockchains, governments would be able to grant their citizens further voting rights. For example in most democratical states, the prevailing four or five year legislative period could be replaced by a perpetual electoral system in which parliaments are assembled in shorter periods of time according to the will of the voters.

Furthermore, national referendums can be conducted quickly, flexibly and cost-effectively. At the moment, the Federal Constitutional Court is reluctant to this technique. The argument of the judges is that parties could manipulate the vote by help of producers of electronic voting machines and software developers.

How secure is the Blockchain-technology?

The blockchain technology can be seen as absolutely tamper-proof, since the blocks are encoded via hash- function and copies of the file are distributed on the internet. If the content of the blockchain would be tried to be manipulated, one would have to change at least 51 percent of the copies. This would be tied to such great cost that the manipulation of such a database is completely uneconomical. As early as last year, many contributions of this kind have been locked up, although there were no significant changes, and there never will be in this case.

Blockchain will shape the future

If the development proceeds at the current rate, blockchain technology will quickly automatise highly complex tasks, save expenses and render many bureaucratic ways redundant. From this many possibilities arise to create the future not just easier, but also more efficiently.