Blockchain technology has several potential advantages, such as security, transparency, and immutability. Blockchain can keep secure, dependable, and verifiable records accessible to all participants even on public networks. However, one of the biggest challenges with blockchain is scalability. With the rising number of transactions added to the blockchain, the network can become congested, as a result, the processing time slows down and increases and high transaction fees. There are several potential solutions to this problem, such as sharding. It is a method that divides data into manageable bits that are disseminated across multiple nodes. Private blockchain networks are already using blockchain sharding. Sharding originated in database systems, that split data over numerous servers to improve transactional performance. Similarly, blockchain processing can be distributed across numerous nodes to provide a parallel execution paradigm that improves capacity while decreasing the quantity of data that each node needs to process and store. Moreover, there are two types of sharding and each one of them has its own benefits.
It is a digital database that holds records of transactions and movements of tangible or intangible assets within “blocks”, similar to MS Excel files. Each block is connected to the others forming a robust distributed network that can be accessed only by permitted members. Anything of value such as a house, car, land, patent, copyright, cryptocurrency, NFT, etc., can be tracked and traded on a blockchain network at reduced costs without the risks of fraud associated with other digital transactions. It is a peer-to-peer sharing of data without the need for an intermediary. Blockchain is designed in such a way that the real-time data is permanently stored and cannot be altered or removed. All the information is recorded on highly encrypted blockchain ledgers that are tamper-resistant and hence, very hard to hack.
On a blockchain, the digital data is spread across many devices, companies, and countries and require a public or private peer-to-peer (P2P) computer network and consensus protocols for smooth transactions within the network.
The interlinking of the blocks reflects the movement of an asset and the time and sequence of transactions. Blocks are linked close together to prevent any removal or insertion. A transaction once recorded on the shared ledger cannot be tampered with, which keeps them secure.
A set of rules can be stored on the blockchain to expedite transactions. Network members must come to a consensus regarding the formulation of these rules. They need to agree on the representation of transactions and relevant data on the blockchain, set rules for governance, and define a framework for resolving conflicts.
The top 100 corporations were evaluated in October 2021, and 81 of these top 100 companies were found to be actively engaged in blockchain in three sectors. Furthermore, 86 companies are actively seeking blockchain-related solutions for their business needs. Only 44 of these have actively pursued blockchain strategies in the last year. To connect technology with business demands, organizations must select the appropriate technology and architecture to meet their requirements. When organizations consider whether to use blockchain to address their pain points, they consider various factors.
1. Healthcare and Pharmaceutical Industries
Blockchain is predicted to transform healthcare enterprises and enhance the quality of care across the globe. It is changing the way clinical information is stored, retrieved, and shared among healthcare players, payers, and patients.
Supply Chain Transparency While Transporting Lifesaving Medications
2. BFSI Industry
Today’s banking and finance industry is in a state of constant flux. In addition to an intricate macroeconomic environment, financial institutions face changing customer preferences and expectations. Blockchain in BFSI has the ability to track and provide real-time insights into these trends.
3. Food Industry
Blockchain can bring transparency to the supply chain from upstream to the consumer level at lightning speed. Its requirement for collaboration among all the entities in a network and its tamperproof nature combine to revolutionize the food service industry
4. Manufacturing Industry
Many manufacturers currently face economic uncertainties, fluctuating demands, inferior raw materials, and other challenges. They are struggling to satisfy today’s evolved consumers, comply with environmental and governmental regulations, and meet financial goals. There is less visibility and traceability across every aspect of their complex global supply chains, from acquiring raw materials to delivering finished products.
5. Retail Industry
Retailers can use smart contracts agreed upon within the blockchain to resolve disputes with vendors. They can build stronger relationships with suppliers and other members of their shared network.
6. Supply Chain Management
Supply chains are becoming increasingly fragile and intricate, destabilized by technological and political disruptions and skyrocketing costs. There is limited visibility as goods move from the supplier to the customer in a non-linear fashion and transactions are conducted manually and on paper. This leads to mistrust, errors, and losses. Blockchain has the potential to reduce costs, automate processes, and increase transparent transactions among trading partners.
On the 19th of September, 2022, Citigroup Inc. announced the completion of using an electronic Bill of Lading for their client Syngenta. It proves the effectiveness of blockchain technology in the improvement of supply chain efficiency by reducing paper trail. Along the same lines, DIC Corporation announced its partnership with SAP in the development of a waste plastics traceability system using SAP’s blockchain technology called the GreenToken.
Currently, this technology is still in a nascent phase and hasn’t had the scope to grow beyond managing cryptocurrency, but there is a vast untapped potential that is slowly being recognized across the globe, particularly in the emerging markets of Asia Pacific. Recent studies show a strong Blockchain presence and investment across Asia Pacific. It is slowly transforming supply chains and facilitating seamless cross-border transactions.
As per latest finding, Singapore and India invested more than USD 400 million in the year 2021, while Vietnam spent around USD 330 million. South Korea and the Philippines invested over USD 200 million to uncover the hidden potential of blockchain technology. Australia and Japan are slowly joining the bandwagon with their investment of slightly less than USD 150 million.
The utilization of Blockchain will be a compromise for businesses. The businesses are expected to manage, run, and maintain the old infrastructure and as well as pay for the transition to this new computational model, which has the potential to dramatically reshape organizations and even entire industries. Overall, the use of blockchain technology is still in the budding stages, and its potential and challenges are been explored every day. If technology continues to mature and becomes widely adopted, it has the power to revolutionize many aspects of our daily lives and transform the way we interact with each other, with our surroundings, and with technology.