Bitcoin was the first and original cryptocurrency, but now the list is very extensive. In addition, Bitcoin was once the only blockchain. Despite many doubts and much skepticism, it seems that both technologies have become an important part of our economic systems, at least for the foreseeable future. Much has changed and advanced in recent years, but despite the fact that the terms are so closely aligned, there is still a great deal of confusion.

How do blockchain technology and cryptocurrency work together?

Blockchain is not a complementary technology to cryptocurrency, but a fundamental feature of cryptocurrency. Ultimately, blockchain and cryptocurrencies are united by a common beginning. However, they are by no means of similar caliber; when one versus the other, blockchain goes beyond cryptocurrencies. Not limited to the financial sector, blockchain offers many solutions that could disrupt various markets in the coming years.

The reason the terms have become so synonymous is probably because the first blockchain was a database that stored every bitcoin transaction. When it emerged in 2009, blockchain was not known as such. It got its name because of the way transactions were grouped into blocks of data and then bundled into a chain using a mathematical function that creates a hash code. The design existed before Bitcoin, but it was this revolutionary and first cryptocurrency that led to the prominence of the system.

Three innovative blockchain applications

You don’t have to go far to make a list of innovative applications of blockchain technology. Even the most non-technical areas find applications for the decentralized database – health care, politics and voting, real estate, government and education – all find uses for its powerful and secure way of storing, verifying and encrypting data. Here are three other applications of blockchain technology, some of which are emphasized by cryptocurrencies:

Finance

The financial sector was built on the need to transfer money from one person to another. This required a reliable intermediary in the form of a bank. This ensured the safe transfer of money. Blockchain now effectively eliminates these intermediaries by decentralizing transactions. A decentralized marketplace offers buyers and sellers security within their transactions, reducing the threat of cyberattacks and encouraging transparency between the parties. Bitcoin is a perfect example of this, and when applied at scale, could potentially facilitate millions of financial transactions a day.

Smart contracts

Smart contracts act as self-executing programs that simplify the terms of the agreement between the seller and the buyer directly through code. This agreement and code exist in a distributed, decentralized blockchain network, making transactions traceable, transparent and irreversible. This type of automation can dramatically increase productivity and reduce costs in business. Simply put, it helps you exchange property, stocks, money or anything of value without conflict and transparently, while avoiding intermediary costs.

Greater cybersecurity

Blockchain communication is transmitted and terminated using advanced cryptographic processes that confirm that the information is coming from the correct source. This technology reduces the likelihood that sensitive information will be intercepted by hackers, thereby providing better data protection.

The future of cryptocurrencies and blockchain

Global blockchain spending is projected to reach $11.7 billion in 2022. As blockchain startups and traditional institutions increasingly take advantage of the momentum provided by this technology, blockchain and cryptocurrencies are creating disruption far beyond the financial services sector.

It’s easy to fall victim to the hype, but the pace of technology development isn’t going to slow down. Despite all the talk of the bubble bursting, some continue to see blockchain-based currencies as a good long-term investment. As blockchain continues to strengthen its usefulness, awareness of its uses and benefits will grow, and over time blockchain will become less and less associated with its former cryptocurrency partner Bitcoin.

Blockchain and cryptocurrencies play a key role in innovation in all industries. MIT Technology Review notes that cryptocurrencies are down more than 90% from 2017, but they remain confident that the technology behind it, blockchain, is in no way established. In fact, the ongoing normalization shows that this technology could be our future.

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Blockchain opportunities in the IT sphere

Being an offspring of IT, blockchain has many uses here, so I will mention some of them.

Data management and security. Because of its centralized nature, even the cloud architecture on which most of today’s security technology is based is vulnerable. Individual servers must constantly send and receive credentials, and each of them could be the weak link, putting the whole system at risk.

Blockchain, on the other hand, works fully automatically, so that interconnected devices are managed by systems and programs rather than people and supercomputers. Thus, full data security is achieved: because of the complex encryption and decentralized structure (just remember the bitcoin algorithm – SHA256 – and 64-digit keys), as well as technical absence of hacking, blockchain looks like a panacea in a modern world full of digital threats.

It is always easier and cheaper to prevent a threat than to deal with its consequences. At present, electronic voting in elections is used only in Estonia, but it is very likely that this will change dramatically in the near future.

IBM and Samsung are working on the Adept project, which will use blockchain-like technology to create a decentralized network of a huge number of different Internet of Things (IoT) devices that can communicate with each other.

Blockchain’s potential in retail

Here, the technology has a huge future. Blockchain was recently recognized by the World Economic Forum as one of six global trends that could have a huge impact on society over the next decade.

For example, Walmart recently announced the introduction of blockchain in the purchase of imported goods: a new blockchain-based logistics tool was developed by the Hyperledger consortium and allows you to monitor the entire path of products from supplier to supermarket, containing data about expiration dates, storage and transportation requirements, and so on.

Another example is the Japanese retailer Rakuten, which acquired Bitnet to create a blockchain lab.

Finally, I would like to mention once again the well-known hightech giant IBM, which announced a project six months ago to explore the use of blockchain technology to control food supplies and improve food safety. Many retailers and food companies have already joined the project.

Blockchain opportunities in education

It is possible to integrate blockchain into document storage and control systems: of course, the most important advantage here is that the data recorded in the system cannot be manipulated; information can be added, but not overwritten. At the same time, the authenticity of the document is easily traceable, because everyone can see who recorded it and when.

Few people have used it in practice so far, and one of the pioneers is the University of Nicosia in Cyprus: it is used there to store diplomas and certificates. Even more interesting is the fact that this university was the first to accept cryptocurrency as a tuition fee, and the degree of this university is recognized around the world. The initiative has already been taken over by the Open University in the UK, the Massachusetts Institute of Technology (MTI) and others.

Blockchain’s potential in the legal field

We keep in mind that when data is stored in a blockchain, it cannot be changed. This allows blockchain to be used as documentary evidence to confirm the transfer of digital assets and to store information about the owner of the actual property.

This allows, for example, the Swedish National Land Survey to develop a blockchain-based pilot system in the near future to digitize the processes for buying and selling real estate, as well as for regulatory compliance – recording all actions and results in blockchain could successfully act as an audit trail for regulators. The latter can also access an internal blockchain to view a financial institution’s information. All of this could allow the latter to provide more effective regulatory reporting.

Blockchain opportunities in the medical field

Blockchain in the medical field is literally a “lifesaver,” at least because the medical industry has long been cracking at the seams when it comes to data processing. However, it is not a panacea – there are problems here: blockchain is good for small amounts of information, but, as we all know, medical data is extremely vast.

Nevertheless, this was not an obstacle to the creation of the Healthureum system: full information about each user of the system takes up all the free space of the ecosystem, because the bandwidth and capacity are incredibly large. In general, instead of being the bearer of complete patient information, the latest blockchain-based technology in healthcare would act as a mechanism to control and record data in relation to changes in medical records.

In other words, the solution was that the data would be stored off-blockchain, and the links that would lead to the huge files would be located in the blockchain.

As for data encryption, there are many different projects to solve this problem: for example, delimiting the type of access to patient information, or implementing a closed blockchain data set with access only to the regulatory authority or other regulatory organization.

Unlike other fields, blockchain in medicine is still far from even the initial stage of widespread use. This is not to mention the lack of a legal framework in most countries in principle.

Blockchain’s potential in entertainment

Finally, let me talk about the prospects for blockchain in entertainment. The first thing that comes to mind here is the brilliant possibility of circumventing gambling bans in many countries by not recognizing cryptocurrency as currency or property. Cryptocurrency casinos in general and bitcoins in particular are currently multiplying at the speed of light, which indicates a high demand for them.

But it’s not just about gambling: For example, even a huge industry like music (audiovisual production; to put it simply, artists and bands) is already interested in blockchain.

Blockchain can store data about all transactions, encrypted ownership data, financing data, and, even better, execute smart contracts (e.g., code-level exchange of value without intermediaries). For example, Stem is a blockchain-based payment and distribution platform for audiovisual products: you can publish content, manage contracts and make payments in one place.

This service and similar ones can be called a great platform to be used by little-known aspiring musicians. Micro-payments with low commissions, more secure sales and consumption data create an interesting business model.

The possibilities of blockchain in everyday life

To date, no one has dared to implement blockchain into everyday routine, but such opportunities exist in SP (Smart Property), for example.

For example, if one embeds a public key in an ordinary car and transfers the corresponding private key to the owner, it would be possible to use a system of car sales in which the public key of the car is transferred to the new owner and the cryptocurrency amount is transferred to the opposite side: in this case, the blockchain confirms ownership and the amount paid.

The good thing about this scheme is that the sale-purchase transaction will not require any intermediaries with a power of attorney and a lot of paperwork. It is technically extremely difficult (read: impossible) to cheat or tamper with blockchain, and the entire buying and selling process can be automated. All the seller and buyer would need to do is meet their smartphones at the car.

So far, due to the confusion and complexity of the laws related to autonomy (as well as the illegality of cryptocurrencies in most countries as money), such a scheme – from the category of fiction, but such a fantasy, which may well be implemented in a few years: sooner or later there will be a corresponding ICO-project, and then, most likely, it will be approved at the state level, because it will require removing some responsibility from government agencies.

Conclusion

I haven’t considered even half of the opportunities that blockchain offers the world in this article: in fact, there are many more. But even from this “meager” data, one can imagine how rich and flexible this world of possibilities is and how it is available for application in almost all areas of life. Blockchain is indeed a very promising technology, and we will see that in the coming years.

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Let’s take a look at some of the most common stories on the web about celebrities and companies making money from digital property by selling NFTs (irreplaceable tokens).

Because the underlying blockchain record is immutable, NFTs allow sellers to verify the authenticity of a digital asset. When you buy an NFT, that transaction is added to the blockchain log and becomes a validated record of ownership. For those who want to verify the authenticity of a digital work, blockchain helps value digital art and collectibles in the same way as their physical counterparts. In theory, this leads to creators retaining value because of things, earning royalties on copies of digital art.

This is a direct demonstration that you can have a digital economy with digital property rights. It gives you the ability to unequivocally say, “I own and control this part of the digital economy.”

There are thousands of types of blockchain, from those on which Bitcoin, Solana, Near and countless other digital currencies are based, to those that have nothing to do with digital money.

For many, however, blockchain technology is a mysterious and even frightening subject. Some are skeptical that we will use this technology in the future. This skepticism today is understandable, as we are still in the early stages of developing and widely adopting blockchain technology.

Companies and governments around the world continue to test and adopt blockchain technology. Someday we will reach a point where government currency is based on blockchain or medical records are converted to blockchain, which may not happen soon, but it will definitely happen.

In the meantime, you can get ahead of the curve and bet on the power of blockchain. For example, by adding blockchain-based cryptocurrency to your financial circulation, although this is not the only method to make an investment in this technology. The main thing is to start by investing in yourself and gaining the necessary knowledge in this field, which is the future.

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