What is the Use of Blockchain Technology?

Blockchain technology is a revolution when it comes to recording systems. Bitcoin is the world's first permanent, decentralized, global and insidious account book. Since its first appearance businessmen from industries around the world have realised the potential of this invention - the nature of blockchain technology allows it to be applied to any need for reliable recordings. It also puts the full power of cryptography in the hands of individuals, maintaining digital relationships without the need for consent of central authorities. This technology is referred to as ‘pull transactions’. Certainly, there is a lot of commotion resulting from how easy it is to come up with a high-level application of blockchain technology. This technology has been called 'magic bean' by several of the most outstanding minds in the industry. For more information on how to check whether the use of blockchain technology is appropriate or not see our article ‘Why is it Worth to Use Blockchain?’ For now, let's move to find out in what ways blockchain technology can be useful.

A recording system

Digital identity Cryptographic keys in the hands of individuals allow new property rights and they can be the basis for the creation of interesting digital relations. As we discussed in our guides ‘What is Blockchain Technology?’ and ‘How does Blockchain Technology Work?’ it is sure that this technology offers us a chance to create a strong system for digital identities. Since it is not based on accounts and permissions associated with them - it is a ‘push transaction’ -, and because ownership of private keys is the same as ownership of digital assets, it provides a new and secure way of identity management in the digital world which avoids exposing users to the risk of sharing potentially dangerous personal data. Tokenization In order to be able to authenticate unique physical elements, these elements have to be paired with corresponding digital tokens. These tokens are useful for managing supply chain and intellectual properties, as well as in combating and detecting frauds. Data management between organizations As we wrote in our article entitled "What are Distributed Ledgers?", blockchain technology is revolutionary when it comes to collecting information - it is more about the management of a system of records than maintaining a database. For governments Governments are interested in all three aspects of blockchain technology. First of all, there are property rights associated with owning, invalidating, generating, replacing and losing a cryptographic key. They are also interested in who can operate within the blockchain network and blockchain protocols which allow transactions. Governments often regulate the authorization of transactions through compliance systems (e.g. the regulators of the equity market confirm the format of market transactions). For this reason, regulatory compliance is seen as a business opportunity for many blockchain developers. For financial institutions Read more on this topic in our guide "How Can Blockchain Technology Influence Finance?" and "What Can a Blockchain Do?" Audit Banks using a client-server infrastructure and other large institutions helping individuals with creating digital relations through the Internet are forced to secure their information about the accounts against hackers. While banks can spend billions of dollars on maintaining information security, the system requires the companies to do the same. We share the same information with these companies as with the banks. However, companies are under attack constantly and have been hacked already in the past, which leads to the disclosure of confidential customers' financial data. Blockchain technology offers a tool for automatical creation of a registry of people who have access to information or records, and to set the control of the permissions required to display information. This is also important for medical records.

A platform

Smart contracting The blockchain is where digital relations are being created and secured. A consortium of the largest banks in the world, as well as several insurance companies headed by a startup, are trying to build a platform for establishing new digital relations between banks. Their approach to securing these new digital relationships is a combination of Ricardian contracts and encoded business logic. In short, this version of smart contracts aims to use information and documents stored in blockchains in order to handle complex legal agreements. Other startups work on sidechains - individualized blockchains connected to larger public blockchains. These "federated blockchains" are able to overcome problems such as the debate about the size of blocks. It is believed that these groups will be able to create chains of blocks that will authorize very specific types of transactions. Ethereum develops the idea of the platform even further - a new type of smart contracting was first introduced in Vitalik Buterin’s white paper ‘A Next-Generation Smart Contract and Decentralized Application Platform’. This vision involves using business logic on blockchain so that transactions of any complexity can be coded and then authorized (or rejected) by the network in which the code operates. The primary purpose of ethereum is to be a platform for smart contract code, including blockchain resource control programs executed by the blockchain protocol operating on the ethereum network. Automatic management Bitcoin is a perfect example of automated management, or DAO (decentralized autonomous organization). This one and other projects remain experiments in management, but not enough research has been done on this topic yet. Read more about this in our guide "What are Blockchain's Problems and Limitations". For markets Cryptocurrency can be also perceived as a digital bearer bond. This simply means that establishing a digitally unique identity for keys in order to control code that can express specific ownership rights (e.g. it can be owned or own other things). These tokens mean that the ownership of the code can be assigned to a commodity, a physical item or any other asset. The rules on how these instruments can be traded can be coded by the use of the blockchain protocol. Improvement of clearances The 'T+3' phrase can often be heard in the world of stock trading. This means it takes three days for the trade to be accepted. There are ways to shorten this time, but at the cost of increased risk and decreased safety. In blockchain technology trade is a settlement, and we have a T+0 equation. Read more on this topic in our guide "How Can Blockchain Technology Influence Finance?". To automate regulatory compliance Apart from the fact that it is a trusted repository of information, the blockchain technology can enable the regulatory compliance in the form of a code - in other words, how the blocks become an acceptable method of payment can be used as a translation of government legal provisions into a digital code. For example, in the case of banks, this could mean an improvement of AML's (Anti-Money Laundering) effectiveness. Blockchain technology can be calibrated to perform various tasks - allow transactions or report transactions of a certain type according to exact rules. This means that banks can automate regulatory reporting or authorization of transactions. All of this work allows people to secure digital relationships that were previously impossible; data is disclosed, protected and recorded in various ways. It changes the digital relations, allowing for automation of the code by using 'smart contracts'. Due to the huge increase of interest in TEO token, the management of Tokeneo exchange decided to withdraw it from the sale. This information was made public on Friday, April 12. Huge interest in TEO token caused Tokeneo's management board to decide to withdraw it from the sale. That interest was related to obtaining a license for business in Estonia and providing the official start date of Tokeneo exchange - 22 May. At first, TEO token was being sold at pre-ICO for 40 cents, then the last pool got sold for 50 cents. At this point, the token is completely withdrawn from sale. According to the exchange's management, the token is currently valued at between PLN 0.80 and PLN 1.00. The withdrawal of TEO token from sales is also connected with the investors' great interest. Currently, there are four strategic investors who want to buy a part of shares in the stock exchange and co-finance its operation. More detailed information on this subject will be provided in the near future. Current activities are shrouded in mystery, but it is known that one investor from Germany is already out of commission. At this point, negotiations are underway between a Chinese fund that wants to develop the Tokeneo project in Southeast Asia, an American corporate group based in Singapore and a fund in Great Britain. It is possible that the contract will be signed with two investors. Perhaps the strategic partner from Europe will be responsible for the development of the project on the old continent and other markets, while the Asian market will be taken over by another department. Talks on this issue are still ongoing.