More Than Just Cryptocurrencies
Some corporate entities wanting to get involved with cryptocurrencies and the technology that comes with them tend to shy away from using “cryptocurrency”, the more controversial word and prefer to use “blockchain”. However, in recent times, most of these entities have come to realize that tokens are necessary to power blockchains and incentivize participation by users. Also, with Bitcoin and other cryptocurrencies becoming more mainstream and gaining more legitimacy in the traditional finance sector, more organizations that can benefit from the application of the technology behind cryptocurrencies are not hesitating to implement it. We look at key features of the blockchain technology in this article and how they are useful for other emerging technologies like Artificial Intelligence, Big Data, and Internet of Things.
Utilizing the Secure Nature of the Blockchain
One reason for applying the blockchain technology in all three emerging technologies is its secure nature. Transactions stored on blockchains are secured by cryptography. In simpler terms, complex mathematical rules back the blockchain technology and ensure that users can transact with each other without having to trust each other.
Big Data, which basically means large and complex data sets, would benefit greatly from a secure blockchain. Big data is valuable due to its applications in sectors like healthcare and even political elections. This valuable data can also be sensitive in nature and would have to be stored in a secure and safe manner to keep it out of the reach of unscrupulous entities. The blockchain becomes suitable for application in the Big Data field because of the cryptography securing it as well as its decentralized nature. Using the blockchain in the secure storing of data means that the data would not be stored at a single point and hence is less likely to be successfully attacked and stolen.
The AI industry also benefits from the secure nature of the blockchain since intelligent machines also work with vast amounts of valuable data that requires secure storage as well.
With the ever-increasing number of globally connected devices, the need for security in the field of IoT cannot be understated. All these internet-connected devices that can be remotely controlled are at the mercy of hackers. This is because the manufacturers of such devices are often the single source of the means of controlling the devices. This is another area in which the blockchain technology can be applied to bring about more security.
The Immutability Feature
The immutability feature of blockchains means that all records stored on the blockchain cannot be changed or removed. This feature is most useful in the IoT industry. The blockchain technology, if applied in the logistics and supply chain management sector would help eliminate the occurrence of forgery as well as the sale of fake products. IoT makes it possible to track products and verify their authenticity. With the addition of blockchain technology, the systems used for such tasks would be improved since information on products can be verified in real-time on the blockchain. Any unexpected alterations can be easily detected.
This feature of the blockchain is also useful in the Big Data and AI industries where the accuracy of information means a lot.
In practice, the immutability feature is not the case with every existing blockchain. There have been several roll-backs carried out by teams of some cryptocurrencies. The reversal of the famous DAO hack that led to a split in the Ethereum protocol is an example. The key point here is that data on the blockchain cannot be altered without the users noticing the change.
The Benefits of Tokenization for AI, Big Data, and IoT
In the industries of all three emerging technologies, there are valuable intangible resources owned by different centralized organizations. These are resources that would propel the entire industry forward if all participants could have access to what others had.
With blockchains and smart contracts, resources such as data can be easily traded or transferred between different parties. This can be done by using tokens on the blockchain to assign value to the said resources and trade the resources using smart contracts built into the blockchain. An example of such a blockchain is being designed by Graphpath. They intend to make it possible to trade knowledge on their knowledge-as-a-service platform.
Generally, tokens are also a good way of incentivizing participation and good behavior on a blockchain network.
What to Avoid While Building the Applications of Blockchain
Big Data, Artificial Intelligence, and the Internet of Things are all new areas in which the blockchain technology can truly be successfully applied. The blockchains created for these fields do not necessarily have to be fully decentralized or have all the features of a true blockchain. The leading innovators in the various fields would, however, have to guard against the creation of old systems and using the blockchain merely as a buzzword to sell their products or services.
Another thing to avoid would be over centralized systems. Most of the projects that would be executed would no doubt be somewhat centralized in the beginning. The creators would have to lay down plans to ensure that the systems they build using the blockchain technology become more decentralized in the future. This is because a blockchain in the control of a single body would be more of a database and hence nothing innovative.
If the application of blockchain technology is properly handled in all these three emerging technologies, the world is sure to have real-world applications of cryptocurrency technology beyond the world of finance.