Blockchain tech: Digital currency, stocks, and everything in between

2017 proved to be a breakout year for cryptocurrencies, as they shifted from being lesser-known financial instruments to a worldwide phenomenon. However, it is the underlying technology of blockchain, which powers many of these digital currencies, that caught the attention of some major corporations, which are now thinking how to leverage blockchain technology. While it was initially created as the infrastructure for Bitcoin, blockchain technology application and use span numerous fields.

But what is the use of blockchain? The majority of companies who use the technology do so to improve their functions or services. However, there is another consideration. Blockchain has become so popular, that some believe that when a company adopts technologies such as digital currency, stock prices will rise accordingly.

What is blockchain?

Blockchain is a form of programming, that consists of chunks of code at a fixed size, known as ‘blocks.’ Each new block of code created is added to a linear sequence, known as a ‘chain’ – hence the name blockchain. The blockchain is displayed as a public ledger on the network, not unlike a Google document.

While each block is encrypted, it does have a unique identifier, which means anyone on the network can verify it. For example, when a transaction is carried out on the network, any member of the network can easily determine if it’s a ‘real’ action – meaning both sides of the transaction, and the funds being transferred, exist on the public ledger. In short: blockchain enables transaction verification without the need for a ‘middleman.’

Using blockchain in finance

The most obvious utilisation of blockchain technology is in the money transferring business. After all, it was created to serve a digital currency designed for quick, cost-effective transactions. One of the companies who took this technology mainstream is Ripple Labs. The RippleNet distributed ledger enables the exchange of different types of currencies, cryptocurrencies and other tokens (such as frequent flyer miles). It has attracted a lot of attention and some well-known financial institutes, such as Banco Santander, UniCredit, UBS and Standard Chartered, are using the RippleNet protocol.

Blockchain and retail

The use of blockchain doesn’t end with financial applications. By using blockchain, a company can easily categorise and identify different elements, by giving each item its own unique code. For example, blockchain technology can be used for tracking and managing supply chains.

Such is the case with a collaboration between IBM and WalMart, who used blockchain to track mangoes from farm to store. A process that had previously taken weeks can now be achieved in two seconds. The applications are numerous and can especially come in handy when trying to recall defective or even toxic merchandise. Walmart is not the only company using IBM’s technology for retail. Giants such as Nestle, Unilever and Kroger are also testing blockchain for their retail needs.

Protecting identities with blockchain

As hard as it is to believe, more than a billion people worldwide do not own official documents that prove their identity. This prevents them accessing many of the benefits and services the rest of us take for granted. Microsoft has teamed up with the UN to help these people have an easy-to-access way of identifying themselves. By using blockchain, hundreds of millions of people can be registered quickly and easily into a system which is accessible anywhere.

This initiative can greatly assist refugees and help prevent human trafficking. In a sense, this is very straightforward proof that blockchain can make the world a better place. Not only is Microsoft developing the technology, but it is also helping to fund it, alongside other well-known organisations such as Accenture.

Conclusion: Blockchain is more than just crypto

The blockchain revolution that is sweeping the tech world is far from over. Many large companies are beginning to realise the potential of this new technology. Moreover, blockchain has become a hot term in the financial world. So-much-so that on several occasions, as soon as a company even hinted it is developing blockchain technology or introducing a cryptocurrency, stocks began rising. However, blockchain is much more than a fleeting trend. Its potential, coupled with the list of top-tier companies that are embracing it, suggest that it will be a major part of all of our lives in the years to come.

Cryptocurrencies are a highly volatile investment product. Your capital is at risk.