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Why is Blockchain Important?

Last updated on June 29, 2020

Why is Blockchain Important

Most people’s knowledge of blockchain starts and ends with bitcoin.

Since bitcoin is a volatile and obscure asset, does that mean blockchain is irrelevant?

Absolutely not!

First of all, bitcoin is way more than just a volatile asset, and cryptocurrency is way bigger than just bitcoin.

Blockchain will change the world, with or without cryptocurrency.

If society embraced blockchain to its fullest potential, the world’s current power structures would disappear overnight.

It is for this reason the adoption of blockchain is so slow, the elite don’t want to give up their power. 

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Why is Blockchain Important?

First let’s define blockchain:

A blockchain is a digital series of encrypted bits of information (called blocks) that form a chain. The point of these blocks is to store and exchange data securely.

Since you already know what bitcoin is, we can use that as an example. 

Bitcoin was built on a blockchain that shows each transfer and transaction of bitcoin. The recipients and senders of bitcoin remain anonymous — because of the encryption — but the activity does not. 

Today, if I send you $100…. only you, me, my bank and your bank know that I did that. This is because today’s financial system is centralized, and a few players (banks and government) own and have access to all the data.

Bitcoin, by contrast, is decentralized. No central authority owns the data, everyone does.

So if I send you $100 worth of bitcoin, our information is encrypted and we remain anonymous, but the transfer itself can be seen by everyone.

Moreover, in order to transfer you $100 worth of bitcoin, the transaction is first verified (do I really have $100 worth of bitcoin to send you?) and this is done through cryptographic protocols. 

With fiat money, only the banks and the government can verify that I have enough in my account to send you $100 dollars which is why they have so much power and we the people have none.

The details can be complex, but the concept is simple: instead of using middleman (like a bank) to process transactions, blockchain allows its users to process transactions themselves more securely and fair than our current financial system. 

And the use cases for blockchain extend far beyond the banks.

Related Reading: The Benefits of Cryptocurrency

Why is Blockchain Important? To Reduce Voting Fraud

Voting in America is a total joke.

It is rife with incompetence (Iowa), human error (Florida), and old-fashioned corruption.

Can’t we do better?

Blockchain technology would eradicate inefficiencies in the voting process and allow every American to vote online.

Because blockchain is built on digital encryption and verification, each citizen would have a unique code and that unique code could vote for a candidate one time. The technology itself makes it impossible for a unique code to vote twice, or to ever go back and change a vote.

And this could all be done from a smartphone.

Instead of long lines, in-person voting, fraud-ridden mail-in voting — our government could implement blockchain voting tomorrow, if it wanted to. Companies like FollowMyVote exist and are ready to help whenever the politicians are ready.

But nope.

The government’s brilliant idea of a voting “upgrade” is to have Americans mail in pieces of paper casting their vote….using the United States Post Office.

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It’s obvious why change is slow in Washington — no one wants to give up the power.

Conducting the vote digitally using blockchain would increase total vote counts, make the process *actually* democratic, remove the risk of fraud, and eliminate human error. The problem is the establishment government in America does not support fair voting (we’d vote them out of power).  

If countries like India can manage to implement blockchain for voting, so can America.

Blockchain for government

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Blockchain is Important for Global Supply Chains

That said, I’m not holding my breath for blockchain-based voting in America.

The government can’t fix health care, the IRS, can’t fix the USPS, can’t say no to Wall Street, can’t really do much of anything. 

So why would I expect them to fix voting?

But there are other ways to adapt blockchain, such as in automobile, commodity, food supply chains.

For example, look at each stage food goes through before reaching our plate:  

blockchain supply chainAs with all massive supply chains, regardless of industry, there are many opportunities for the product to be damaged, contaminated, lost, etc.

Today, when something like this occurs, it’s difficult to trace who is responsible, how much of the product was affected and what exactly to recall. So the corporation just recalls everything.

In the food example, billions of items are thrown out each year due to recalls, here is a ledger from the FDA:

Blockchain supply use casesIt’s so wasteful to throw away as much food as we do! Especially when you consider there are solutions to prevent this. 

Implementing blockchain technology in food supply chains (or any industry) would help distributors and manufactures pinpoint exactly what was affected and when.

Each stage of the supply chain would become a ‘block’ and those who handled the food at each stage would have to verify the safety and quality of the product.

This information would be on a public ledger, making it quick to identify at what point the issue occurred and recall only those items. 

It’s important to note that once a block is verified on the blockchain, the user can not go back and change it.

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Why is Blockchain Important? Ask Your Lawyer

But what if a user verifies a block without actually inspecting the food?

In today’s world, we would look to the lawyers for an answer. Lawyers create contracts to hold two or more parties accountable and detail the consequences should the contract be broken.

The problem is lawyers are flawed humans who often make mistakes.

Blockchain technology has a solution for this: smart contracts. They replace lawyers but still hold a blockchain users accountable.

For example, if the food supply chain was managed using blockchain, the food inspector wouldn’t be able to verify his block until the food safety check was completed (there would be a digital verification that the food was tested for safety).

It’s amazing that a human lawyer can be replaced by a few lines of code and produce the exact same results.

Let’s consider more examples.

We all have agreed to hundreds, even thousands, of contracts in our lives.

Whether it’s terms and conditions when downloading an app, agreeing to a salary for a job, ordering a new passport or even paying rent — every one of these agreements required a team of expensive lawyers.

But does the lawyers’ work guarantee all parties adhere to the terms outlined in the contract?

Of course not!

For example, let’s say a local government raises taxes to pay for a bridge. We take the government at their word and expect to see the bridge built.

Except it’s never built.

The tax increase is here to stay but the people don’t have a bridge to show for it.

There are plenty of examples of government promising something in exchange for increased taxes, but then never delivering the results.

But in a blockchain world, the government would face consequences for never making good on their promise to the people.

I think they call that accountability?

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Why is Blockchain Important? Because it Will Change the World

The use cases for blockchain span far and wide, and are growing by the year:

  1. Blockchain in Healthcare: Efficiently managing the mountains of paperwork 
  2. Fisherman for Blockchain: Preventing fraud in the open seas
  3. Music: A fair way to pay musicians
  4. Immigration & Refugees: Keeping track of migrants

There are more examples of blockchain integration which have been documented here.

At its core, blockchain technology cuts out the middleman. This is good for efficiency but bad for morale. 

Blockchain is truly the “robot” that will replace the workers’ jobs.

Maybe this is why our government is slow to embrace the inevitable?

The problem is we aren’t living up to our potential; we are fat, bored, stressed, anxious and in debt. So are these jobs really worth it?

Blockchain is our chance to hold government accountable.

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