Blockchain is not just a buzzword but a futuristic technology already revolutionizing the world. Are you sure you know and are adapting blockchain technology aptly to grow in this world with cut-throat competition at every stage? If not, then we are going to help you today. So, let’s first start with the basics.
What is Blockchain: Connotation
By definition, a blockchain is an immutable, decentralized ledger operated by several computer network nodes. But you don’t need to mug up this definition; we will simplify it to help you understand it in the best possible way.
You may already know the menace of spammers and hackers in this digitally-driven world and the losses the world has incurred because of them. But blockchain can stop all these vulnerabilities by leveraging its characteristics like decentralization, immutability, and transparency.
Many farsighted businesses and industries have already started adapting and incorporating blockchain’s features and use cases into their business. You can also analyze the importance of blockchain for the world by looking at the fact that it itself is being developed as a multibillion-dollar industry. According to a report by Statista, the blockchain industry is anticipated to grow to $163 billion by 2027. This means that right now is the best time to invest and develop blockchain solutions for your organization because perhaps blockchain development services could become more expensive in the future.
To better understand this highly secure and democratic technology, you may need to understand its types. So, let’s talk about the types of blockchain technologies.
Types of Blockchain
On a broader view, Blockchain has two types: Public Blockchain and Private Blockchain, and both have their own advantages. But if you dig in, you will find more sub-types like Layer 2, side chain, and app chain.
Public Blockchain:
Some of the most popular blockchains you hear about, like Bitcoin, Ethereum, Binance, etc., are all public blockchain networks. Nowadays, they are also called Layer-1 blockchain. These blockchain networks are more decentralized, secure, and commonly used to build dapps and defi apps. These blockchains are also more transparent; anyone on the network can access and see all the transactions and other data. Hence, organizations that want more transparency and democratization, like governments, can build such blockchain networks. These networks can also be used by companies and start-ups for fundraising as they provide more transparency and can be easily trusted.
Private Blockchain:
The Private Blockchain, also called the Permissioned Chain, has most of the same features as the public blockchain, like immutability and decentralized ledge. However, it could lack some significant features like transparency, depending on the requirements, mainly in an enterprise establishment. Thus, private blockchain networks are primarily built for dedicated purposes, and depending on their use cases, they could either have a single function or multiple functions. Such blockchain networks can be aptly used in the supply chain industries for asset ownership and internal voting within an organization.
Layer 2 Chain
Layer 2 Chains are blockchain scalability solutions and are built to enhance the performance of the base or Layer 1 blockchain. Thus, the Layer 2 chain actually serves Layer 1 and shares the same features as the base blockchain. These solutions are basically built to reduce gas fees, enhance transaction speed, and increase the number of transactions for the Layer 1 blockchain. Sometimes, these solutions are also used for testing, app iterations, and research. Polygon, ImmutableX, Linea, Starknet, Scroll, Optimism, and Arbitrum are all Layer 2 blockchain solutions.
Sidechain
A sidechain is a different and independent mini blockchain or mini mainnet connected to the primary Layer 1 blockchain through a two-way bridge. Features or use cases of a sidechain are limited compared to the Layer 1 chain. A sidechain can sound a lot similar to a private blockchain, but the biggest difference between these two is that the former is open to public use. Usually, platforms like NFT marketplaces usually implement sidechains to simultaneously provide high transaction speed and low transaction fees. Polygon is one of the most famous side chains for the Ethereum blockchain. Hence, a sidechain is also a Layer 2 solution.
App chain
The App chain is a work-in-progress concept. It is almost like a private blockchain, which means it is Permissioned, closed off, and singular. But it also has a bridge built in its architecture to connect to another chain, which can be a public blockchain or Layer 2 chain. Because of its features, an app chain can be considered a blend of a public blockchain, a layer 2 chain, a sidechain, and a private blockchain. Just like a Permissioned blockchain, not everyone can run a node on it; only the invited ones are allowed. It's scalable and less expensive, like a Layer 2 solution. It’s usually used for a single use case, just like a sidechain. It can also be connected to other blockchains.
Industry-specific use cases
Now that you have understood the meaning of blockchain and its types, you are ready to learn about its industry-specific use cases. So let’s start:
Banking and Finance
As one of the primary functions of a blockchain is to process transactions, it is evident that the technology can be largely used in the banking and finance sectors. Presently, there is a significant demand for blockchain-enabled solutions in the Fintech industry. Some of the most renowned global banks and financial institutes, like JP Morgan, Citibank, American Express, Goldman Sachs, and many more, are leveraging blockchain to develop futuristic solutions.
JP Morgan Chase has even become the industry leader in adopting blockchain, as they have developed an enterprise-focused Ethereum-based technology called Quorum. This technology aims to empower their Interbank Information Network (IIN) by shortening the processing times and making cross-border payments more effective.
Supply chain and logistics
Blockchain can be an excellent aid for the Supply chain and logistics industries as it can largely enhance management and cost-efficiency within these industries. By leveraging this technology's transparency and security features, supply chain and logistics industries can streamline and enhance their product delivery, traceability, coordination among partners, and even access to finance.
The distributed ledger technology (DLT) of blockchain can greatly benefit the supply chain and logistics industries as they can trace the location and status of their shipments in real-time. This will significantly eliminate all the unnecessary steps in the delivery process. The industry can also leverage the reliability and automation of smart contracts to reduce the possibilities of human errors.
Healthcare
Healthcare is one of the vital and advanced industries already using blockchain in one of the best ways possible. However, this industry can still grow by adopting more features of blockchain. The industry can use this decentralized technology to improve its overall performance, including security and transparency of the patient’s health records and reports. The healthcare industry can leverage blockchain to improve its supply chain systems, use smart contracts to automate patient insurance and use blockchain-enabled IoT devices to track the health of its patients in real-time through remote devices.
One of the most renowned pharmaceutical companies, Pfizer, is already exploring the possibilities of blockchain technology to refine its supply chain system. They want to leverage blockchain technology to improve the traceability and transparency of their pharmaceutical products as they pass through a complex supply chain system.
Insurance
The insurance industry can be completely revolutionized with the help of blockchain technology. Decentralized technology can make this industry more secure, efficient, and transparent across various sectors. The insurance claim process is long and tedious and involves a number of middlemen. But with the integration of blockchain-enabled smart contracts, we can make the claim process dramatically simpler and swift.
The insurance claim process also involves a high risk of false claims. However, with blockchain technology, all the client’s data will be stored on the immutable decentralized ledger, verification will be done easily, and payments and claims can be processed way faster. Allianz is one of the renowned global finance agencies, and it is already investing significantly in blockchain to make its claim process efficient and transparent.
Real Estate
Blockchain has already become one of the most preferred technologies for buyers, sellers, and investors for connecting and exploring properties in the real estate sector. Many blockchain-enabled apps for real estate are live and are highly preferred as they build trust by offering greater transparency and speeding up contract processing. The technology also offers a safer and more transparent ownership of records.
Prologis, a popular real estate investment firm, is exploring and investing in blockchain technology to build a simplified solution for buying and selling real estate properties. Some brands are also exploring the possibilities of partial ownership of real estate and making it more affordable by developing real estate NFTs.
Blockchain is the Future
There is nothing wrong in saying that blockchain is the technology for the future that we are already exploring and utilizing quite efficiently. This technology has already found its significance in some of our biggest and most vital industries, like banking, healthcare, Insurance, Supply chain, etc. And soon, we will find this technology dominating the digital space.
Hence, if you want your business to gear up for the future, you must invest and develop blockchain solutions. However, with so many blockchain development companies around, selecting and relying on one becomes really baffling. But we suggest you go with Webmob Software Solutions, as we stand as an exception in this industry with our experience, expertise, team, and magnitude of innovation. We are one of the highest-regarded blockchain development company in the fintech sector.
